Dealer markups are going away, what about for EVs?

I'm starting to see some of the Ioniq 5 being listed for sale a MSRP in the Seattle area. Unfortunately, they are listed in transit. So anytime between now and the next three months your purchase should show up.

I wouldn't be surprised if one can snag one of the VWs in transit at MSRP. Again you will need to wait until it shows up.

Anyhow I think we are starting to see beginning of the end of dealer markups for most EVs.

 

Good but it may still be a few months before dealers start competing for customers

 

I try to temper my desire for affordable EVs with a notion of scale:

The Automobile and Petrol powered marketplace is heavily influenced by Fleet orders - and this demand shifts production toward a product (or away from one).

While we private user might think we're the target market for new designs, a buying group that books 20% of annual sales has more impact on what gets built.

The Rivian and Canoo experiments are novel in that a customer funds a supplier to build what it wants, instead of waiting for legacy makers to come around.

 

I just searched the Phoenix area for new EVs.
Genesis G80: Supposedly available in Arizona, no cars are showing
Ioniq 5: One dealer has it, markup of $4500
ID4 Pro/ Pro S: Seems to be available at MSRP for 2022 and 2023. There are appear to be more than 100 available but none of them are discounted, though there are no dealer mark ups other than the dealer installed junk.
So there is inventory but no price competition

https://www.vw.com/en/inventory.html/__app/inventory/results/id.4?distance-app=100&page-app=0&year-app=2023 if you want to take a look

 

There are two dealers in the Seattle area that have over 50 Hyundai Ioniq 5s at each dealership listed for sale at MSRP. However, they are all in transit. There are plenty of VWs in transit too.

VW is planning to manufacture 90,000 ID4s in their Tennessee plant next year. So dealer markups on VW ID4s is history in most locations.

 

The Canoo pickup is certainly novel. Their take on dashboards: "Dashboard? We don't need no stinkin' dashboard!" There's a third set of A-pillars just out of the picture. If I could just get used to the Rivian's novel headlights, that would be my choice over the Canoo.

 

A friend of mine says Ioniq 5 is still marked up $30k and EV6 is $20k over MSRP. I guess the EV6 is a better deal.

 

I can't believe that will last on vehicles that won't be eligible for federal rebates starting in January.

 

Of course, it's a matter of supply and demand. I agree that with the federal tax credit going away last August 16th, demand would naturally decrease.

Unfortunately, Kia is sending fewer and fewer EV6s to the US, so the supply-side is decreasing at the same rate as demand. Because dealers have fewer EV6s to sell, they have even more incentive to lard on their mark-ups to maintain overall profitability.

While GM and Ford are still trying to get their EV act together, there aren't really any price-category alternatives to the EV6 or Ioniq 5 (I'm not a VW fan).

 

Several dealers in Maryland are listing some 2022 Kia EV6s at MSRP. The 2023 models do have ADM attached. The same can be said for Volkswagen ID.4s. However, they are 2023 models mostly from Tennessee.

 

The Tesla owner asks the rhetorical ‘what is the value added engineering of a dealer?’

I notice GM and Ford have announced plans for direct sales.

Bob Wilson

 

The benefits of a dealer

1. Cities and towns can garb sales tax revenue from residents of other towns (the buyers do not have to live in their town). That is why dealers get incentives
   
2. Purchasers need to get the feeling that they negotiated hard and made deal no one else could, that makes driving more pleasurable
   
3. Dealers need to liquidate their inventory of scratch resistant coating and window tints and sell you loan insurance, and high priced services to register your car. What else will the dealer do with all that stuff.
   
4. Purchasers need an opportunity to kick the tires before buying the car
5. Cities need to find a use for acres of land for that dealer use for inventory? Else what would they do, may be make an park

 

You can add civic sponsorships.

 

I know this is a joke list but #4 is actually true. I need to be able to test drive a car before commuting to buying it. A car is the second largest expense in most peoples’ lives. In fact, it can be argued that it is greater than a house because homes appreciate and cars depreciate. Plus most people buy far more cars in their lifetime than houses.


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Being an early-adopter, I didn't get to test-drive examples of my last 5 cars before committing to purchase: Honda CRX Si, Honda Insight (gen-1), Honda Insight (gen-2), Honda Clarity PHEV, MINI Cooper SE. My trust in these two companies was not betrayed. For those less hot-to-trot, however, test-drives make perfect sense.

 

I ordered my SE sight-unseen because I was already a MINI driver and I knew it would be good. It actually turned out better than I hoped, exceeding the experience of my (nearly identical) ICE MINI in every way.

I did have a chance to sit in a number of EVs this summer, and it was an eye-opening disappointment. The junkiness of the VW ID.4 interior really surprised me, and I found the Tesla Model Y dull. The Ford Mach-E I remember as being weird. The Polestar was the only one I tried that turned out to be somewhat decent. These are subjective opinions, but it seems like the interiors of EVs are drastically different from each other. I can appreciate the value of trying out cars before buying them.

 

I did put a deposit on a Leaf in 2011 and a Mini SE in 2021 before driving either. Both were fully refundable and I did get to test drive a Leaf and a Mini S before committing to buy. So I’m a bit of an early adopter too but I still need my test drive. I just love driving and need to be sure that the car will be engaging enough for me.


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I am much the same. I can't imagine buying a car without a test drive. Over the years I've checked out many cars that seemed great on paper but once I got in and drove, something put me off, or just seemed like I wouldn't want to live with it for years. In the case of my current EV, the test drive absolutely sold me on the Kona. I'd driven a Bolt and a Leaf and thought they were okay, but once I drove the Kona it was love at first sight.

 

Yeah, the Kona EV is a nice car to drive. I miss mine...