Effect of rising interest rates and market losses on EV sales

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R P

R P

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Well, another 75 basis point bump in interest rates and brutal market drops this week. Can't be good for those wanting to finance or lease a new vehicle. And with EVs costing more now, and no $7500 tax credit in the US for some cars, have to believe some people are rethinking their new car purchase plans.

So who is thinking of dropping or delaying plans to buy any EV at this time due to rising interest rates?
 
I'm thinking there will be markdowns on US vehicles that are ineligible for the new tax rebates. I plan to sell my current vehicle this week and wait for a bargain.
 
While there is nothing wrong with selling while the market is high, I wouldn’t bet on the prices of “non tax credit” EVs dropping in the near term. The demand is just too high this year. Maybe next year… but then supply costs and inflation will be a big question mark.


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I think we will see some price reduction in car prices by July of next year. I think Tesla will bring out a $45,000 standard range Model Y somewhere between July and the end of next year. I believe we will see a $5,000 reduction on the rest of the Tesla vehicles around the same time.

The US dollar has gained a bit compared to the Euro and Pound. So we may see some reduction in the prices for vehicles coming out of Europe.

So it's probably not a bad plan to wait to purchase until the middle of next year.
 
Yes, it will be interesting to see what happens. Some people who have been waiting for a Hyundai Ioniq 5 have seen the total cost of their purchase go up by about $10,000 in the past few months that they have been waiting. I have not heard about many people cancelling their orders though. If it was me, there is no way that I could just say, yeah, okay, now that my car is in, I'll pay the $10,000 more.
 
Sold my VW ID4 a few weeks ago.
Few reasons. VW has shown no progress in software updates here in the US. Bugs not being fixed has made the car a local driving auto IMO.
Chattanooga will be producing US models soon so I wanted to get my money back plus some before used ID4’s start dropping.
I will buy another EV but I am realistic in thinking that until supply chain issues are fixed world wide, I can forget about buying another EV in the next 3-4 years.


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rcarter3636 said:
Sold my VW ID4 a few weeks ago.


I will buy another EV but I am realistic in thinking that until supply chain issues are fixed world wide, I can forget about buying another EV in the next 3-4 years.
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Amen, Reverend. I'm not far behind you.

It is unconscionable to sell a consumer product that you can't (or won't) repair.
 
I thought prices might fall on some of those vehicles no longer eligible for the 7500 tax credit, like the Ioniq 5. But actually, my closest dealer just increased their gouging. Their website now shows a 6500 markup on 2023 Ioniq 5s. Plus almost 2 grand in installed junk.
 
The average new car transaction is $47,000 so I doubt it will have that much effect on sales given there are EV’s in that area.
The lack of Tax credits on Tesla’s hasn’t stopped their sales…
 
R P said:
Some good news with supply increasing and maybe demand slowing.
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Holding my breath, waiting for the decline of EV prices.

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In light of the rising interest rates and their potential impact on the cost of financing a new electric vehicle (EV), some prospective buyers may begin to explore alternative financing avenues, with leasing emerging as an attractive option. Leasing offers distinct advantages, particularly in the context of economic uncertainty and financial flexibility.

Leasing an EV is an arrangement where the buyer essentially rents the vehicle for a predetermined period, typically two to three years. During this period, the lessee pays a fixed monthly fee to use the EV, which is generally lower than the monthly loan payments required when purchasing a vehicle outright. This lower monthly cost can be a compelling factor for those who are concerned about their budget and the impact of rising interest rates. Moreover, companies that offer leasing options often utilize CRM data enrichment to tailor their offers to the specific financial needs and preferences of potential lessees, further enhancing the attractiveness of leasing as a viable alternative amidst fluctuating economic conditions.
 
The inventory shortage adds a lot of anxiety when leasing a vehicle. I had a lease on my previous vehicle and was limited to my new purchase options. My wife's new vehicle came in 2 weeks before her old lease was due to be returned.
 
I have always preferred 'end of lease' vehicles for first purchase of a new technology. You avoid the "new car" depreciation and the cars are generally well maintained.

Bob Wilson
 
marshall said:
For most folks, the removal of the $2,000 to $10,000 dealer markup would be a decline in EV prices.
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My local Hyundai dealer is currently charging a $1,450 dealer markup on the Ioniq5. 2023 Konas (old design) are offered essentially for MSRP (thought they're playing this weird game of marking it up then offering a "discount").
 
Bruce M. said:
My local Hyundai dealer is currently charging a $1,450 dealer markup on the Ioniq5. 2023 Konas (old design) are offered essentially for MSRP (thought they're playing this weird game of marking it up then offering a "discount").
Click to expand...
It sucks to live in paradise. :)

Local Seattle dealer is marking the SE and SEL down $3,000, plus Hyundai is running a $5,000 to $7,500 off promotion. Selling the SEL at around $42,300 after discounts.

https://www.hyundaiusa.com/us/en/of...ModelGroupCd=5004&TrimName=SEL&OfferType=Cash
 
marshall said:
It sucks to live in paradise. :)

Local Seattle dealer is marking the SE and SEL down $3,000, plus Hyundai is running a $5,000 to $7,500 off promotion. Selling the SEL at around $42,300 after discounts.

https://www.hyundaiusa.com/us/en/offers/detail?Model=IONIQ 5&ModelYear=2023&YrSerCd=20235&ModelGroupCd=5004&TrimName=SEL&OfferType=Cash
Click to expand...

This is getting a bit off topic, but I am stuck with probably the worst Hyundai dealer in the galaxy. Don't even get me started about their service department.
 
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