Whats your strategy for year 2030 / ban of ICE vehicles?

[ChipChop]

At the start of 2023 Tesla decided to lower their prices quite dramatically, up to £8,000 off list. According to Glasses "Teslas list price strategy is affecting the whole EV market creating slower transaction quantities as customers are waiting to see what will happen on the new and used car markets. Teslas strategy has already had an impact on the new car market , making competitors lower their list prices. It will have an impact on absolute residual values as well." Then there is the impact the low list price new MG4 will have on the used EV market. Why buy a used secondhand 'expensive EV' when you can buy a cheap new MG4 instead?

Workbook: LaunchReport_MG4

tableau.autovistagroup.com

 

[markjay]

Yes, I've seen lots of new MG4s over the past few weeks. Certainly lowering the price if new EVs will make them more affordable both new and second hand.

 

[MikeInWimbledon]

My friend Jack , the one I mentioned earlier , who was a butcher and ran his one shop , certainly bought a new Merc each time it had been superceded by a newer model , thus getting a good deal on the old model , still a new car . My dad did the same , and I know a few other , reasonably well off people , mostly older and retired , who did . Our plumber bought a new W124 260E when he retired , and used it mainly to go to the golf club .

In the street where my mother lived , most of the neighbours , who bought the houses when the estate was built in the seventies were elderly , retired and had nice cars , mostly newish .

I think for comfortably off retired people it is quite normal to buy such cars .

Oh my W140 , I bought from a retired doctor who had bought it new , along with his several others , including his R107 and his Pagoda which are kept in carcoons inside his garage ; he'd tired of the S Class and had just bought a G-Wagen , also new , so he sold me the W140 for £500 ; and I ran it for three years until it was going to need an expensive ABS repair , at which point I gave the car away to a friend who was willing to take a punt on it

Exactly. The retired have cash, and realise that there’s only a limited amount of time to spend it, and that life is far cheaper for the retired than it is for those who work 12 hours a day 45 weeks of the year.

As an aside, in the good old days, doctors, dentists and other professionals used to have a lot of cash hanging around from side, cash deals. Money just crying out to be used on cars, house extensions and homes in Spain.

Different times before all the AML regs came along…

 

[ChipChop]

Yes, I've seen lots of new MG4s over the past few weeks. Certainly lowering the price if new EVs will make them more affordable both new and second hand.

Nice way of saying Teslas list price cuts have tanked the new & used EV market.

 

[MikeInWimbledon]

At the start of 2023 Tesla decided to lower their prices quite dramatically, up to £8,000 off list. According to Glasses "Teslas list price strategy is affecting the whole EV market creating slower transaction quantities as customers are waiting to see what will happen on the new and used car markets. Teslas strategy has already had an impact on the new car market , making competitors lower their list prices. It will have an impact on absolute residual values as well." Then there is the impact the low list price new MG4 will have on the used EV market. Why buy a used secondhand 'expensive EV' when you can buy a cheap new MG4 instead?

Workbook: LaunchReport_MG4

tableau.autovistagroup.com

Yep, but it’s broader than just the MG. The whole car industry is busy dumping EVs into the market, so there’s stiff competition from Korea, all of China, Europe and so on.

All fighting to gain “second mover advantage” in the footsteps of Tesla. Desperately trying to get their product recognised as the next standard.

In Tesla’s defence, they are achieving economies of scale and they are getting enormous tax breaks on building factories, so they can argue that their motors are now “genuinely” cheaper to make.

 

[Bobby Dazzler]

So what do prefer, car manufacturers charging “too much” for EVs to maximise profits and making them out of reach for ordinary people, or car manufacturers reducing the price for EVs to reflect their changing cost base (and possibly market demand)?

It’s difficult to justifiably and credibly criticise car manufacturers for making EVs too expensive and too inexpensive, especially at the same time.

 

[MikeInWimbledon]

Nice way of saying Teslas list price cuts have tanked the new & used EV market.

Not really. The global industry has gone EV.

Tesla has reduced prices, but at the same time as its profits have gone through the roof

 

[markjay]

Nice way of saying Teslas list price cuts has tanked the new & used EV market.

I think that we're confusing again relative movement with absolute figures.

The Glasses Guide article you linked is showing that historically EV values have been trailing slightly behind ICE cars, recently they have surpassed ICE cars but are now in a downward trend going through a 'correction' (as Glasses Guide puts it).

And so Tesla's shenanigans aside, overall second hand values of EV cars are roughly the same as ICE cars (according to Glasses Guide, anyway). And there's no suggest that this will change dramatically in future.

Now, going back to the theory that second hand buyers shun EVs due to concerns regarding battery longevity.... it's not supported by the data (not by Glasses Guide's data, anyway).

 

[ChipChop]

So what do prefer, car manufacturers charging “too much” for EVs to maximise profits and making them out of reach for ordinary people, or car manufacturers reducing the price for EVs to reflect their changing cost base (and possibly market demand)?

It’s difficult to justifiably and credibly criticise car manufacturers for making EVs too expensive and too inexpensive, especially at the same time.

My understanding is Glasses are a long established and credible organisation whose job it is to lay bare the market ramifications of Tesla's recent pricing strategies.

 

[markjay]

Yep, but it’s broader than just the MG. The whole car industry is busy dumping EVs into the market, so there’s stiff competition from Korea, all of China, Europe and so on.

All fighting to gain “second mover advantage” in the footsteps of Tesla. Desperately trying to get their product recognised as the next standard.

In Tesla’s defence, they are achieving economies of scale and they are getting enormous tax breaks on building factories, so they can argue that their motors are now “genuinely” cheaper to make.

Interestingly, I've also noticed that there are plenty of new EQA and EQB cars on the road (starting at £45k and £52k, respectively), which is good news because MB's EV debutante - the first generation EQC - was fraught with problems.

 

[markjay]

My understanding is Glasses are a long established and credible organisation whose job it is to lay bare the market ramifications of Tesla's recent pricing strategies.

Whatever the futures effect of Tesla's new pricing strategy might be... the fact remains that up to now EV depreciation figures haven't been significantly different to those of ICE cars. I believe this sort of thing it called nowadays 'a myth buster'.

 

[MikeInWimbledon]

Once upon a time ….. Cortina’s, Escorts, Vauxhalls and Renaults used to depreciate heavily from new …. Because of fleet sales and company car tax breaks. Not because they were bad cars, just because there were too many around.

We are all giving an enormous tax break to companies buying EVs. It’s a great corporation and income tax dodge.

This will result in a glut of corporate spec EVs hitting the used market 3-4 years on, in just the same way that Mondeos used to.

Vote Green, Liberal, Labour and Conservative and you get what you voted for. (And at EU level that included UKIP). We wanted CO2 reduction. We’re getting it.

 

[Darrell]

Nice way of saying Teslas list price cuts have tanked the new & used EV market.

If Tesla can drop the price by £8000 surely it shows that they’re overpriced in the first place.

 

[Darrell]

Interestingly, I've also noticed that there are plenty of new EQA and EQB cars on the road (starting at £45k and £52k, respectively), which is good news because MB's EV debutante - the first generation EQC - was fraught with problems.

BIL has a 21 plate EQC that’s been faultless. Is this the first gen version??

 

[ChipChop]

If Tesla can drop the price by £8000 surely it shows that they’re overpriced in the first place.

Overpriced in a BEV market where there is more supply than demand.

 

[markjay]

BIL has a 21 plate EQC that’s been faultless. Is this the first gen version??

View attachment 147031

It was first introduced in 2019, but has undergone significant software updates since.

 

[BTB 500]

has undergone significant software updates since.

a.k.a. debugging!

 

[markjay]

Overpriced in a BEV market where there is more supply than demand.

Which at current benefits consumers greatly.

However, it's a free economy, and supply and demand will affect prices and the market will reach and equilibrium eventually.

 

[Pontoneer]

HP was with us “back in the day.”

Just not as clever as today, where the Corporates borrow money at low rates, and then lend it via offshore finance SPV’s which garner special tax breaks, and who then construct special pricing on the new vehicles to make the finance look even more attractive.

Car manufacturers don’t make profits from manufacturing cars, profit is made through finance and services.

The couple of times I borrowed to buy cars , and once for a motorbike , it was personal loans provided by my bank , and not for the full cost of the purchase . Although not secured against the vehicle , I was a longstanding customer with the bank and my salary going into my account every month ; I kept each vehicle much longer than it took to repay the loan .

I also once bought a bicycle from Halfords on 10 months interest free credit ; I could have just paid it all at once , but why use my own money when they offered me use of theirs at no cost to myself ?

 

[MikeInWimbledon]

The couple of times I borrowed to buy cars , and once for a motorbike , it was personal loans provided by my bank , and not for the full cost of the purchase . Although not secured against the vehicle , I was a longstanding customer with the bank and my salary going into my account every month ; I kept each vehicle much longer than it took to repay the loan .

I also once bought a bicycle from Halfords on 10 months interest free credit ; I could have just paid it all at once , but why use my own money when they offered me use of theirs at no cost to myself ?

Understood, the challenge to interest free credit - currently available on a new £50k Tesla if you want one today - is that really it's a hidden discount, on an arguably overpriced item. Wave a wedge of wonga at them and they'll often give a substantial discount instead.