I threw a hard elbow into GM earlier this week for its plan to raise its dividends and institute a share buyback, so I’ll give some airtime to the big claim the company made yesterday: EV profitability next year. There are some big asterisks, of course, and also some big opportunities for GM.
Speaking of EV-ish GM vehicles, there’s a government probe into about 73,000 Chevy Volts over a power-loss issue. Remember the Volt? I like Volts.
Vehicle affordability is a big issue these days and Ford thinks, hey, maybe it’ll be able to help there in 2024? That would be nice.
And, finally, NASCAR news. Because I also like NASCAR.
How GM Is Going To Make EVs Profitable
General Motors CFO Paul Jacobson sees a path to profitable EVs (before taxes and interest expenses) around the second half of 2024.
Speaking to the Barclays investor conference he had this to say, via Automotive News:
“It’s no secret that at the end of the day, our EBIT [EV] margins are substantially negative,” Jacobson said, adding that GM is investing in battery cell plants and other infrastructure to scale production. “We’re building for the future. So as we continue to ramp up, we’re going to see pretty significant benefits going forward.”
While Tesla is wildly profitable with huge margins, it didn’t happen overnight for that automaker, either. This is what it takes to build a business and, if the company can achieve some form of net EV profitability next year that’s still quite an achievement.
What’s curious to me is how they’re doing it. Thankfully, GM provided some helpful slides (side note: GM has the most annoying media site but extremely legible and clear slideshows).
Slide #1 is above and shows that the company expects variable but positive profits by the second half of the year and mid-single digit pre-tax/pre-interest profits by 2025. It also sees Brightdrop, tax credits, parts and accessories, and software enabled services as profit centers.
But how do you get the expected 60-point margin improvement?
Another slide! These are great slides. The biggest chunk comes from “scale” and that makes sense. In general (he he), the more you can make of something the more efficiently you can make it. The Ultium EV platform meant to underpin the current/next generation of GM’s electric cars has been slow to reach consistent production, but GM is telegraphing lately that most of this has been resolved.
The 20% from battery costs also makes sense, both because lithium costs are dropping and GM sees its own material pipeline improving. Here’s the real bummer, and it’s point #2, the 20% cost improvement it sees from varying its product mix. You can also get a sense of this in the next slide:
It’s not a secret that vehicles like the Blazer, Silverado and Hummer are likely to be more profitable than, say, the Equinox EV or the as-yet-to-be-determined Bolt replacement.
That sucks. It makes sense, I suppose, but it sucks.
America badly needs affordable EVs and the Equinox EV looks great. GM is also slowing down plans for more entry-level trims of its vehicles, including the Silverado.
Again, assuming a limited amount of battery electric vehicles that can be produced next year, higher-margin vehicles are maybe the only way to achieve profitability. Is that kind of profitability actually important or is it a messaging thing?
If it were me, and it’s probably to the benefit of GM shareholders that it’s not me making the call, but if I had a say in it I’d be all-in on a $30k Equniox EV to build up market share and put pressure on Tesla and everyone else. That’s just me, though.
Chevy Volts Under Investigation
You know, on the other hand, maybe it’s extremely admirable that GM is taking such a slow ramp-up to sales of EVs as it makes sure everything works correctly.
I say this because the National Highway Traffic Safety Administration (NHTSA) has opened up an investigation of about 73,000 Volts over issues with the Battery Energy Control Module that might cause some of the hybrids to lose power or fail to restart.
General Motors (GM.N) previously issued a technical service bulletin saying if vehicles fail to restart, the BECM may need to be replaced and reprogrammed but has not recalled vehicles, NHTSA said. GM ended production of the Volt in early 2019.
GM did not immediately comment.
NHTSA said the issue may pose a safety risk if vehicles cannot move with the flow of surrounding traffic and is more serious depending on a stalled vehicle’s ability to restart.
We’ll be keeping an eye out for any recall news here at The Autopian for all of our many Volt owners.
Ford Sees Prices Coming Down Next Year
Also at that fancy Barclays Global Automotive and Mobility Tech conference was Ford’s CFO John Lawler. He said vehicles need to be more affordable going forward with more incentives and lower dealer markups.
The way Lawler frames it, via The Detroit Free Press, is pretty interesting:
In remarks made during the Barclays Global Automotive and Mobility Tech Conference, Lawler said the company wants vehicles priced to take a smaller portion of consumers’ monthly disposable income. In 2019, car payments on average accounted for about 13.5% of a buyer’s disposable income and that grew to 15.7% in 2022 and then dipped to about 14.5% in 2023, he said.
Ford closely monitors pricing and spending levels, Lawler said
“We expect that it’s going to revert back to that run rate of about 13.5% as we move through 2024. That’s about another $1,800 per vehicle,” Lawler said. “Dealer margins are still high, so let’s say that $800 of that will have to come out of the dealers. And incentives will probably increase by roughly $1,000. … So that’s how we’re thinking about 2024. That’s all in the plan that we’ve set up, how we’re planning for 2024.”
This works, as Lawler further explains, because he doesn’t see a ton of pent-up demand out there.
I think this is partially correct. Given the current mix of vehicles out there and their pricing, I don’t think there’s more widespread demand above what’s usually expected, which is why downward price pressure is inevitable.
I do think, however, that the success of the Maverick shows that there’s still some demand in lower-cost vehicles that’s simply not being served.
NASCAR’s TV Deals Set For The Next Seven Years
The NASCAR product I most regularly watch is the Xfinity series and it’s already been announced that all of it will be available over-the-air on the CW or on CW’s app in 2025. That’s sweet and, honestly, I plan to try and convince more of you to follow the season with me next year.
But what of the rest of NASCAR? There were concerns that Trucks/Cup would end up on a bunch of different services a la baseball and football. That’s what’s happened, it seems.
You can read the full report on Motorsport.com, but the general idea is below:
Under the new deal which begins in 2025, Fox will get 14 Cup races annually in the first half of the season including the Daytona 500. After Fox, Amazon’s Prime Video will stream five events, marking the first time NASCAR’s premier series will be exclusively live-streamed.
After Amazon, Warner Brothers Discovery will carry the next five Cup races, which will be simulcast on both TNT and the B/R Sports tier on its Max streaming service (formerly HBO Max). NBC Sports will complete the season with the final 14 races, including the championship finale.
That’s going to be so annoying for regular fans. So why does NASCAR want to do this, other than to get money? This is a nice way to get the sport in front of a bunch of different potential viewers who are not currently cable subscribers and therefore don’t get USA and Fox Sports 1/2, where a lot of the races currently end up.
Credit to NASCAR for reportedly getting about $1.1 billion for the seven-year deal, up 40% from the company’s last package.
The Big Question
Do you currently watch NASCAR? How do you feel about this? If you don’t watch NASCAR can I convince you to watch the Xfinity series with me next year? [Ed Note: Or, if you don’t care about NASCAR like I don’t, talk to me about where prices for cars are now, and where you think they should be. -DT].
NASCAR has a consistency problem. Of course this has been an issue of contention since the very formation of the organization back in the late 1940s. It includes everything from how the rules are interpreted and enforced, to their ever increasing greed factor. For example, back 20 years ago, if you had a car that could pass inspection and qualify on speed it didn’t matter if you were Roger Penske, or Dave Marcis. Dave was one of the old school in that he not only drove, but was the owner of his own team for many years. If you had the sponsorship, or the balls and bucks to be a little guy in a big pond, you were welcomed.
Now days teams need to purchase a “team charter” thing from NASCAR in order to play. Basically like a team franchise for the NFL, MLB, etc. It has become a real “pay to play” situation in the Cup series, and the greed has hurt the small independent owners a ton.
The cars in Cup are basically all identical except for decals and minor differences in the body. It has basically become a copy of the old IROC series, or INDY car.
The economics of the current situation has also hurt the guys driving at the lower levels as it has become much harder to secure a stable ride in the Cup series, because drivers are expected to be able to help secure sponsorship, (or even provide it out of pocket) to have a chance to be desirable to a team owner. As a result, there are several teams that may have many different drivers over the season. Many times the driver with the most seat time is not the best driver that team has access to hire.
Some races are just boring or too long. Take Martinsville for example, 500 laps around an extremely tight and short track is just boring for 90% of the laps. Same with the 600 mile race at Charlotte. YMMV.
But they call it progress.
With SVG going over there from Aussie supercars I will be watching Nascar for the first time, no idea how yet but I will be!
I find NASCAR more compelling lately(note: I used to be a huge fan years ago)but I just absolutely despise their playoff format so I can’t get that involved with it. I also think their super speedway races are ridiculous driver deaths waiting to happen. The Daytona 500 is also the most meaningless race that has zero consequences for the rest of the season which I find pathetic for a sport that says it’s the most important race of the year.
Edit: oh and the races are way too long and the season is too long.
Did GM just throw up their hands regarding hybrids after the Volt and the not-so-great body on frame SUV hybrids? Think of all the GM CUVs that could benefit from hybrid technology. It’s great that the Ultimum platform is finally ramping up, but they have so many platforms that could use that hybrid boost in mpg.
Oh and Ford? Get your act together and crank up the Explorer hybrid production line. Police want these things, but selling to the general public should print money.
I watch a lot of NASCAR races but not as much as I used to. I’m getting old and the races are getting old too. Not their fault, I can only sit for so long anymore. About streaming services, I have a few but refuse to pay for more. If a program is on a service I don’t have it’s just a darn shame. Nothing will induce me to pay for another streaming service. It’s got to stop sometime.
Watching bubba turn left for 2 hours is tedious.
2 hours? Try 3-4. Their races are insanely too long.
Most of the races are too long. Even a lot of drivers admit that. What’s kept me watching is the increase in road courses. Those big cars look great on a road course. Most oval races I record and watch the last 30 laps. I’m sure I’m not alone.
The road courses are the only thing I’m interested in with NASCAR at the moment. The racing is almost always interesting at those tracks for me.
Once Junior Johnson announced he was fed up with NASCAR and quit as a Cup team owner (1995), I realized he was right and I stopped watching. I only ever went to one NASCAR Cup race in person (Sonoma, 1994), primarily to see Richard Petty race before his retirement from driving. After that, NASCAR pretty much lost all interest for me.
Richard Petty retired in 1992. He raced in over 1,000 races and won 200 times. He also won 27 races in 1967 which is unheard of.
It’s sad that Jimmie Johnson now owns everything that was once Petty Racing, but they call that progress.
I watched a lot of NASCAR during the boom in the 90’s, when CART/IRL shot themselves in the balls and sportscar racing was in a similar mess, just like a lot of racing fans. I had a lot of fun with it. But then the Chase came, and I didn’t care for it much but IndyCar reunified and I went back to what I loved most, just like a lot of racing fans.
I cannot possible explain points scoring in Cup anymore and my guess is very few people could. I’ve been out of it for long enough now so the Stages don’t bother me as a fan other than I think the entire concept is stupid.
However. I believe the future for racing broadcasts is streaming, and for that matter any sport that’s even remotely niche. If you’re of cloud-yelling age you might not like it, but the reality is media broadcasting is so fractured now that I think monstrous media deals with a single entity are a thing of the past. Having said that, if you’re going to coincide your streaming platform with a network broadcast, the single best thing you could do would be to put it all on one network, so that people can reliably find it. I know the Big Four sports don’t only use one network, but as much as NASCAR wants consider itself equal to the Big Four, it’s just not. It might be America’s most-watched motorsport, but NASCAR really is niche, and they always have been. They got drunk on the boom 90’s and believed otherwise, and they’ve been trying to recapture that lightning in a bottle ever since.
I currently carry subscriptions to F1TV, MotoGP VideoPass and Rally.tv, and it makes following my obsessions so much easier. NASCAR will eventually follow suit, if they have not already, to be honest I don’t even know.
At this stage, no pun intended, it prolly would of been wise for them to go the NascarTV route like the series streams you mentioned. Problem is the broadcasts are so heavily funded by ads, F1TV has no ads, can you imagine how much they would charge for an ad free broadcast? Plus F1TV is like $8 a race, Nascar has how many races, even at that rate it’s a lot for a full sub. No one would pay. But the answer is also not that you need multiple streaming services to see the whole season.
F1TV is the biggest no-brainer in streaming, if you ask me. Granted F1’s global reach is huge, so they can spread the costs. But for comparison MotoGP’s VideoPass is double the price! You get all the F1 practice with it (if you’re into that) and for guys like me who are going to deep-dive the sport, you get 40-some F3 and F2 races as well.
Not sure how much NASCAR.tv would have to be to make money, but if you sell it as getting you Xfinity, Trucks, and hell even ARCA, you could make a darn good value proposition to a lot of people.
I’m so spoiled watching F1 and MotoGP ad-free that when I watch IndyCar on NBC, the interruptions are quite jarring. I’d pay IndyCar a good amount for an ad-free broadcast.
Yeah F1TV is cheap considering. In your package deal for all things Nascar I am really curious what price they would put on it today. Can’t imagine it would be anything less than $500, $42 a month ouch, perhaps they would do like $150 but you get the same ad overloaded broadcast as now.
NASCAR has always seemed silly to me, but it’s been horrible over the last decade or so. I tuned into a race last week (just monitoring the station for work) and there were two big crashes caused by drivers just simply trying to draft from inside someone else’s trunk. “Oh, I’m supposed to stop accelerating after I hit them?”
I also tuned out of CART/IRL starting in the 90’s and only got back into it a couple years before the pandemic, but the last couple seasons have been phenomenal. Watching Ol’ Man Dixon school (most of) the kids, the rise of Palou and O’Ward, Newgarden slipping the fence at Indy to celebrate his win with the fans. Helio getting his 4th Indy win also giving tiny Meyer Shank their first ever Indy win. TK’s final race. Even the crazy track antics of Romain Grosjean.
NASCAR has a redneck problem, for one thing. I still associate it with confederate flag waving morons. It’s also incredibly boring. As a fan of bike racing like the Tour de France, I understand that enjoying some events requires an intimate knowledge of the players involved and the teams’ history. I know nothing of NASCAR and will never have an interest in learning about it. Maybe if they go back to racing moonshine down Deals Gap I’ll tune in.
“I know nothing of NASCAR and will never have an interest in learning about it.”
If that’s true, then how do you know it has a redneck problem?
The preceding sentence offers some context for those with reading comprehension skills, perhaps I should have used semicolon to clarify things?
On NASCAR, call me when they’re buying a car off the showroom floor, putting in a cage and racing seat (but leaving as much of the interior intact as possible), and then putting them on a track that incorporates both high-speed banked turns, and a road course section.
That’s what would get me watching NASCAR.
NASCAR hasn’t raced like that since the 50’s at least.
The 1970s actually. But you’re right. Times sure have changed.
Oh, I know. But the man asked what would convince me to watch next year, and that’s my offer. Carnage with Camrys and Escalades and Mirages and F350s. Show me that, and you’ve got the attention of my eyeballs.
No one asked me, but this is how I would run NASCAR (been saying this for years):
Silhouette bodies on dedicated racing chassis, but the exterior dimensions and shape must mirror the production car on three axes. Aero mods permitted, but I should be able to park the stock car next to it and have them match, excepting ride height.
Engine block and cylinder heads must carry the production part number of something within that OEM’s product portfolio. You want that Lexus V8 in your Camry, go ahead. Everything else is free, including driveline configuration.
I used to say Cup would be eights, Xfinity would be sixes and whatever replaces trucks would be fours, but with the death of eights now someone else can figure out a formula, turbos allowed.
All of the above would get the OEMs involved in a way they aren’t now, and spur development and crazy things similar to winged Plymouths and Aerocoupes and COPO 427’s. It would be easily identifiable, explainable and relatable for the fans.
Also get rid of the Chase and burn the Stages. Reduce every race except the iconic ones by 100 miles each so people can watch within about two hours and not destroy an entire Sunday. Get rid of green-white-checker restarts while you’re at it.
Same. The idea of stock car racing is great. These are not “stock” cars.
These arguments gotta stop. The car hasn’t been like that my whole life and I’m close to 40 now. Yeah, the name says stock car racing but it’s in name only.
As someone who did R/C cars competitively about 20 years ago, I can at least appreciate NASCAR and how to win in stock car racing at a low level.
However it’s not always the most fun thing to watch unless we were doing road race layouts. Same thing — NASCAR starts doing Watkins Glen, Sebring, and Sonoma? Sign me up. The car at Le Mans this year? Awesome. Aside from that? I’ll pass.
NASCAR at the Glen is always hilarious. It’s like watching bears dance on a bouncing tightrope.
Hey, LOOK, they are making a left turn
Except when they don’t.
Hey, LOOK, a crash
Finally GM is getting push to submit a recall on the BECM. The majority of the 2017s have this problem, less in 2018 and I believe doesn’t affect the 2019, yet. Luckily if it fails before 100K miles or 8 years, GM will cover it but a lot of people is out of warranty already based on the mileage, paying out of pocket is around $2000.
BECM, Shift to Park and EGR are the main issues on those Volts. The community for the Chevy Volt is huge, there is a EV tech that works for a Chevy Dealer in the Chicago area his name is Jaryd Carvell, I never met him personally but there is people across the US that takes their vehicles for repairs to Chicago just because of him. For the Chevy Bolt he was doing battery swaps like crazy.
I had BECM and Shift to Park issues resolved under the Voltec warranty and thanks to information online I was able to print documents and take them to the dealer.
Yep – my BECM and Shift to Park in my ’17 were also both covered under Voltec warranty, though many dealers don’t know the latter does.
My ’17 has the Shift to Park problem every once in a while, but I should probably get it taken care of before it becomes a major issue.
Not looking forward to the shift to park problem on mine. Seems like it can be a fairly cheap and easy DIY fix at least with a new microswitch from someplace like Digikey at least.
The BECM failed pretty gracefully with some warning, and they didn’t fight the repair part of the warranty, but it took 6 months to get the replacement part. The CPO warranty included a loaner, but the dealer just said “nope, we don’t have any” and when I escalated to corporate they just pretended that they didn’t even offer CPO.
The Volt has otherwise exceeded expectations, but I won’t be buying another GM any time soon after that.
With apologies I’m reposting a reply I made in yesterday’s TMD, since it bears on DT’s section of The Big Question, and I posted it pretty late yesterday so there’s high likelihood that no one saw it then anyway:
This article made me curious so I went and dug through US vehicle Average Transaction Price (ATP) and household median annual income data and inflation-adjusted them to constant 2016 dollars (random choice of year, but it doesn’t change the shape of the trends). Long story short, inflation adjusted ATP has been climbing since 2017 and hooked up *hard* in 2020, and now sits at more than 60% of median household income for the first time ever (probably since the model T, anyway).
My reading of the data is that the automakers had better figure out how to bring their prices down pretty fast if they want to see annual sales volumes of 17 million units ever again. it took from 2011 to 2018 to get ATP down from 57% to 50% of median income after the last spike in that metric, basically holding ATP constant while the economy caught up to it. That trick may not work this time, since median income has been on a downward trend since 2019, not growing.
Automakers need to find about $5000 / 15% to knock out of their prices, and I don’t think they have that much margin.
5K in margin may be a challenge, but 5K in unnecessary features and trim should be pretty easy.
Maybe if Ford actually met demand for cheap trims of their vehicles they wouldn’t have cut prices on more expensive inventory that isn’t selling…
Like how they announced a Bronco Sport Base then never built it? I mean that’s a sidenote to the Maverick bullshit, but still. Oh and look, the Lightning Pro! Unbuyable at any price!
I think that a lot of these manufacturers fail to account for (or spend resources on) infrastructure. Great, you built the cars but have done nothing to address the public’s reticence to buy them. All of the hesitation or reasons against EVs still exist.
I’m convinced that Tesla was largely successful because of the Supercharger Network and free charging (at the beginning) more than the actual vehicles themselves.
I went to the Michigan 400 in 2001. I had a blast, but it was only because of one HUGE reason. I was in the Owner’s suite. This meant catered food w/carving stations, an open bar, pit access, pics standing on the start/finish line, etc.. Sterling Malin won that year and came up to the suite with the trophy and we did a champagne toast (and a Coors Light toast because Sterling is a massive hillbilly haha) and got a bunch of autographed swag. It was kinda a “never meet your heroes” moment in regard to NASCAR in general.
I still think it’s technically impressive event, but I’ve already been to the summit, lol. Plus, the stages thing is silly and confusing. Also, it seems there is a crash every two laps now and that gets old real quick.
Having it on 3 different networks pretty much guarantees I’ll never watch a race on purpose. So yeah, that’s my NASCAR take. 🙂
Back in the 90’s I was heavy into NASCAR. Went to Dover , Louden , Pocono , Richmond . Spent weekends in a motorhome in the infield , slept in tents and in a Ram truck with slide in camper. Sat in the bleachers with a stop watch for qualifying. And watched every single race on TV. Dale Sr. died and took the sport with him ( I was not a fan , but damn he could wheel ) and it will never be popular like that again. I’m still watching a fair amount of it on Tv these days but it’s not compelling enough to actually plan a vacation or a weekend around it .
Making cars is hard. It appears making electric cars are hard as well.
After writing that witless observation I’ll ask, did you know our very own Torch suffered an Aortic Dissection on Monday?
Right before the holidays, the Torchinsky family will start receiving EOBs (Explanation of Benefits) from their health insurance carrier informing of their portions of the bills for which they are responsible and it’s not going to be fun at all. As such, I’m just relentlessly beating the shit out of everyone here to make a donation to a Medical Expense GoFundMe for Jason.
Note that the operators and authors of this site are far to gracious to be hammering this like I am, so please don’t think less of them. I’m the shill, not them.
Thank you. I was unaware of this.
Awesome idea. I remember donating to the helicopter non profit that saved Hamsters life after his jet car crash. I will send Jason’s Fund some $$’s too as I am all together too familiar with the horror and inhumanity of insurance companies. Come on America: a single payer national Medicare system.
I quit watching NASCAR when they started selling the TV rights to cable-only channels, if I can’t follow 2/3 of the season it kinda loses my interest. I have no idea if it’s possible to watch a full season now without a subscription but by this point I’ve lost track of who half the drivers are that I used to care about.
20 yrs ago it made sense when most people had cable and you could get more sports and event coverage from all the channels, but that made the problem worse, then since the channels were getting all this outrageous channel fees it created a boom in $$ bidding on rights.
I agree with you and even though I haven’t been a Nascar fan since the chase & stages were introduced, on a Sunday if I wanted to check-in on the race most times I can’t as a streaming & antenna customer. My biggest complaint is MNF not always on OTA, screw you NFL.
I stuck around for a little of the chase and stages as I struggled to watch the races online that weren’t on OTA. Honestly the stages are a bit weak but the chase didn’t bother me much, not near as much as the struggle just to watch the damn things in the first place.
That first slide includes a line “All digital and software services”. Please tell me they don’t intend to start forcing subscriptions to access features in the car????
They’re not FORCING you to buy subscriptions… you only have to buy them if you want heated seats, or a nav system, or remote start, or ….anything….
honestly if subs bring down the upfront cost, I’m all for it. But I’m not holding my breath.
Worked for both NASCAR and TNN way back in the day.
Too bad the TV thing has become a huge money grab and pretty much trashed the sport. Especially when the stands are 75% empty at the majority of races.
And fuck this stage racing shit. This ain’t the local short track boys.
Brian France really screwed the pooch. And his sister is ALL about the money.
Screw them.
But do enjoy the other series below Cup level.
Recall watching the races on TNN as a child/teen! They had a ton of motorsports programming in the late 80’s. I loved it.
If I recall TNN was always on the TV in the background during weekends from about 1986? on. Fishing, hunting, drag racing, swamp buggies, tractor pulls, NASCAR, sponsored how-to’s. All kinds of interesting stuff for a car interested kid/teen.
GM Phase 1 – Build EVs
GM Phase 2 – ?
GM Phase 3 – Profit
Time to go to work, work all day!
Phase 2 – stock buybacks, probably
No, phase 2 is…….
Phase 3 is profit.
Honestly, seems like they’ve got a fairly reasonable plan at this point. Some refinement, but mostly scaling up sales so fixed costs are amortized across enough units that they come out ahead.
I don’t watch NASCAR because there are no longer any “stock”cars racing. Remember when you couldn’t race anything that wasn’t also available for sale to the public? That was only thing unique to NASCAR. Now all of the cars are identical platforms with the biggest difference being the decals used to make them appear distinct and the engine sources (Ford, Chevy, Toyota). There’s nothing wrong with this at all, but it’s a far cry from the attraction of watching Richard Petty and Cale Yarborough motor around in cars that at least looked like something I drove. To me, that was the whole appeal. Things change, I get that, but I don’t have to like it and that’s why I stopped following NASCAR decades ago. Every now and then I’ll tune in just to see what’s what, but it doesn’t stick.
If NASCAR would get rid of the stage racing and transition to only picture in picture add breaks where the commercial is in the small screen with the audio then I might be on board with watching more, because as of now it’s fucking terrible to watch.
Also there should only ever be 2 announcers per sporting event, one main announcer who is actually trained in broadcasting and one color commentator, who if they are a former player should also be trained in broadcasting and not just thrust into the gig upon retirement, with maybe a sideline reporter. No rules analysts no halftime shows with 8 people trying to talk over each other, that shit has to go, and also not every thing needs to be compared to golf, if I’m not watching golf I don’t want to hear about it.
Given all the doom and gloom we hear around here all the time, this stat is almost jarringly positive.
The typical new vehicle in 2019 cost $36,000 and was financed at ~4.5% for a payment of $671/month
The typical new vehicle in 2023 cost $48,000 and was financed at ~7.5% for a payment of $961/month
For that to represent only a single point of disposable income speaks to the strength of wage growth (Yes, I know the data is probably messy, probably includes older loans, etc. The overall point remains solid even if the numbers aren’t perfectly accurate).
It could indicate that more rich people are buying cars… and the poors are waiting for something they can afford. That would allow average prices to skyrocket while lowering the disposable income avg. it represents.
I’m certain that’s a part of it.
I do think it’s important to remember that “the poors” have never really been new car buyers.
Except the “poors” are now pretty much anyone making under 100k.
I’m right on the border of that definition. Not exactly poor. I could afford a lower-middle class lifestyle if I weren’t a cheap bastard. What is sad is that is more than the vast majority of people can actually afford, but they use debt to pretend that they can, live paycheck to paycheck, and hope they never suffer a job loss or other unpredictable/unfortunate event that ruins them.
According to a 2016 NADA survey, the profile of the typical new car buyer made about $80k or more back then with regard to individual(not household) income, which put them roughly into the upper quintile of individual income. This is for all new cars, from your lowest trim Mitsubishi Mirage all the way up to the most expensive exotics.
The bottom 80% are basically priced out of new cars altogether. 50 years ago, a basic new car was something the average person very often could afford. As a minimum wage teenaged janitor, my dad paid for his 1970 MGB GT in full, purchased new. Could a minimum wage teenager afford a new Mazda Miata today? Not even close.
and I would rather have the MGB, at 6’2″ I would fit in it. I will never fit in a Miata.
What even is “lower-middle class”? All the class distinctions, I think they’re just labels to divide us and distract from the fact the upper class is the ruling class.
I make around 60K, which as a kid I would have thought was awesome, and even a few years ago would have thought was pretty good for someone not in the trades and without a degree. Now though, even with no CC debt and a paid off (10 years old) vehicle, I still feel relatively broke. Inflation has finally caught up with me, my landlord just raised my rent close to $400, which pretty much sucks up my past 5 years of wage increases. I can’t complain though, it’s still not market rate and could be considered dirt cheap for the area. Luckily, he’s just a local guy who hung on to his first property, and not some corporate outfit.
I can “afford” (as in make the payments) on a 30K vehicle. But I can’t really afford it, that’s far too big a chunk of my monthly take-home. I’d be back to living paycheck to paycheck.
I also am completely priced out of the home market, if I was in the position I am today, say even 5 years ago if I was laser focused on it, I’d be able to buy a home within commuting distance. Now, I’m completely priced out of the market, I’d have to increase my income 2.5 X times to comfortably afford a small single family.
I don’t even remember where I was going with this, but shit’s just effed these days. I feel like the class dividing line is now basically homeowner vs. non-homeowner. Look at all the people who became millionaires over the past few years just by virtue of their homes skyrocketing in value.
In the early 60’s my grandfather, being a high-school dropout working in a factory, was able to buy a brand new 3 bed home in the “nice” area of the town I’m from, while being the sole income while my grandmother stayed home with the 3 kids. I’m sure we all have a story like that. How did we end up so far from that??
I like the class definitions laid out in the following link because they accurately summarize the sort of life experience offered in each strata:
https://resourcegeneration.org/breakdown-of-class-characteristics-income-brackets/
Lower middle class would be described as “middle class” in the above link, while upper middle class would be described as “managerial/upper class”, both of which in the socio-economic hierarchy are below the “ruling class” which is taking the vast majority of the entire productive output of humanity for itself.
Currently, my low six-figure income can grant me a life style somewhere between “working class” and “middle class” as defined in the link above, while remaining out of debt, possibly “upper class” swimming in crippling debt, but I do live in one of the least expensive metro areas in the U.S. I live well below those means, however. I rent a basement in the ghetto for cheap and have minimal bills, use custom electric microvehicles and bicycles for transportation which per mile are cheaper to use than public transit, and am hoping one day I’ll be able to set up a shop and build custom cars. My life experience has bounced around between dirt poor, where I am now, and anything in between.
I know where you can find a “livable” home for $50k, but you’re going to be in the ghetto. I’m not even going to bother trying to buy a house outside of the ghetto unless I can pay it in full. I don’t want the debt load required to get out of the ghetto. I’ve been through 3 job losses in a 11 year span each lasting an average of more than 1 year in spite of making a conscientious effort to get another job while jobless in effort to avoid depleting my life savings. I have absolutely zero confidence I’ll be able to commit to a 30 year mortgage and keep it up for that entire duration given this experience. I could have sunk tens of thousands of dollars into a home that would have gotten foreclosed on three times over by now and/or started a family that I’d probably have lost as soon as the money dried up. My financial habits are conservative on the whole and I always make sure to have a surplus from each paycheck(currently, it’s a majority of my takehome pay). I’m a minority within my generation as I went to college and paid off all of my student loan debt.
The fact is, to live like the Cleaver family in the sitcom from a bygone era “Leave it to Beaver”, frugally and without debt, that’s going to cost a family of 4 about $100,000/year to start, more in the expensive metro areas of the U.S. This $100k/yr household income basically requires two people working decent paying white collar jobs to pull off. That lifestyle used to be possible on ONE income at a blue collar job without debt and was very much the norm more than half a century ago. Today, debt is used by those who can’t afford it to pretend that they can… often with two or three income sources in the household juggling the debt and bills around from month to month.
I could buy a decent new car in full right now, but now nothing on the market exists that appeals to me. Maybe a used Alfa Romeo 4C or a 20 year-old Lotus Elise will be in my future… but for now, I’ll stick with my bicycles and microvehicles, and once I get the workspace, get my electric Triumph GT6 conversion sorted out.
If I were to buy my home I bought in 2019 for the same price today, payments would have been raised by about $300/month just by current interest rates on 30 year loan.
And my home insurance alone went up 25% in 2023 for no reason (0 claims, 0 tickets) so that is another $20/month extra. Car insurance is also $25/month more.
Phone bill went up $50/month this year for the same plan.
Yeah, as soon as I bounce up a bit, somehow expenses catch up with it for no reason.
But I took advantage of crazy hot used car market and traded it my 17MPG on 91 octane when hypermiling 13 year old G8 GXP for $25000 for 33MPG (not even trying increase MPG) on 87 octane GTI. Ended up with spending $15000 on new car (It is Autobarn while nothing else was available. No Si, WRX, Mazda3 Turbo, not GTI S or SE) and saving $130/month in fuel.
The only way the constant rise in housing prices can be sustained is if the money printing not only continues, but continues to increase in rate, to allow the debt load to increase. Per hour of labor required per square foot, housing costs are about 3x what they were 50 years ago, whether buying or renting. Working people are increasingly finding themselves priced out. It’s definitely not sustainable and I predict a much-needed crash will eventually commence. The alternative, is we get hyperinflation coupled with a massively increased homeless population composed mostly of working people. In either case, all the debt created by the banks out of thin air which has allowed more money to chase the housing supply and is partially the cause of prices rising to where they are today, has to be repaid with real labor by working people.
Also, I didn’t realize the G8 GXP was so inefficient. Was everything in good tune? All O2 sensors, EGR valve, mass airflow sensor, spark plugs, and emissions equipment in good working order?
I think both fuel costs and electricity costs are going to skyrocket in the coming years as well. We shall see. Should this come to pass, platform efficiency will be more important than ever.
Yes, I had it since new. I usually get better MPG than EPA estimates on my commute and G8 was beating it also
Considering the graph the other day that about 25% of 2023 sales were $75k+ vehicles. If you analyzed the non rich persons portion of car sales to income, the numbers would look much worse, prolly close to or over 20% of their disposable income.
My point is the comparison, not the actual numbers.
Presumably rich people bought the majority of cars in 2019 as well.
Opinion surveys of the economy were much more positive in 2019, seemingly regardless of the actual conditions. I find that interesting.
Not to bring back some doom and gloom, but I think that decreasing prices a bit may paradoxically increase the percentage of disposable income, albeit temporarily. I suspect that some of this comes from a reduction in overall vehicle sales. If they’re able to normalize the market and cut pricing a bit, I think some of the people holding off may buy something more expensive than they maybe should.
After the initial increase, we’ll see a slow decrease, but it may be a few years before we get back down there. Of course, I could be wrong, but the market has been really weird and I think there are bound to be unintended effects as we try to correct.
Sorry Matt, if my best friend can’t get me to show up at his house to watch NASCAR (for which he is pretty hardcore), I’m afraid you have no chance at all. I love building cars. Not so much the watching of them.