We are about to enter the "post-EV" era...due primarily to the maturity of the charging infrastructure not keeping up with the number of EV units on the road.
Frustration is going to mount, people will start dumping (or not replacing) their EV's...and then we will have 5-10 years where EV sales are in the toilet while the infrastructure catches up.
And, no, the answer is NOT "Franchise Supercharger"...its not scalable at this point and its uncertain if Tesla would even know whether it is / how to make it..profitable.
The market has seen a significant shift in the affordability and demand for cars. Prior to the pandemic, vehicles priced under $30,000 accounted for 38 percent of the market. However, this number has now dropped to just 8 percent. Expensive SUVs and trucks are currently in high demand, leading car manufacturers to focus on upgrading their premium models and reducing their offerings of more affordable vehicles. This trend is accompanied by record-high new vehicle prices and soaring interest rates for financing purchases.
According to CoPilot, a car shopping app, the current car market is the least affordable in modern history, as stated by CEO Pat Ryan. In May, the average cost of a new car reached $47,892, a considerable increase from approximately $37,000 in 2019. Additionally, CoPilot reports that 10 percent of all vehicles sold now exceed $70,000 in price, reflecting a 3 percent rise compared to five years ago. On the other hand, the percentage of new vehicles priced below $20,000 has dropped to a mere 0.3 percent, down from 8 percent five years ago.
Insights from Ivan Drury, director of insights at Edmunds, reveal that consumer preferences have shifted towards luxury vehicles with advanced features like touch screens, heated and cooled seats, and 360-degree cameras. In response to this demand, dealerships have increased their stock of expensive cars, while car manufacturers have scaled back on more affordable models. Drury explains that raising prices to offer additional features and increase vehicle size with each redesign is a logical response to market demands.
The elevated interest rates continue to contribute to the high costs of financing a car purchase, despite the Federal Reserve's recent decision to pause consecutive interest rate hikes. Edmunds reports that average monthly payments have reached a record-breaking $733 in the second quarter of this year. Moreover, a record-high 17.1 percent of customers are financing cars with monthly costs exceeding $1,000. Drury expresses concern over the challenging situation faced by consumers in today's car market, as high vehicle prices and daunting borrowing costs create significant obstacles. The possibility of future interest rate increases adds to the uncertainty.
Consumers considering the purchase of used cars as an alternative to higher prices will also face disappointment. Recent data from CoPilot shows that the average price of a used car has increased by $1,693, or nearly 6 percent, since February. In May, the average price reached $32,113, marking the fourth consecutive month of price increases.
Car insurance costs have also surged this year, further burdening drivers. According to the consumer price index data released last month, typical car insurance bills rose by 17.1 percent in the year leading up to May.
However, there is some positive news regarding gas prices, as they have significantly decreased compared to the previous year. According to the AA, gas prices dropped to $3.55 per gallon on Thursday, a considerable decrease from $4.87 at the same time last year. This marks a $1.33, or 27 percent, drop in just 12 months, as reported by the US Energy Information Administration (EIA).