The average new car price hits a record high, Volkswagen gets a new CEO, Eaton’s working on locking differentials for EVs. All this and more in today’s issue of The Morning Dump.
Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.
The Average New Car Price Cracks $48,000
It’s no secret that new cars are more expensive than ever, but that doesn’t stop the numbers from being shocking. According to Kelley Blue Book, the average new vehicle in June cost a whopping $48,043. That’s the highest average transaction price on record, up roughly $895 over May. Granted, this figure is buoyed by several factors. Luxury cars made up roughly 18 percent of new vehicle transactions last month, an unusually high figure that may be indicative of manufacturers’ focus on high-margin models. In addition, the price of the average hybrid vehicle rose $3,593 last month, while the average EV price rose by $2,444. In addition, Kelley Blue Book reports that non-luxury car buyers paid an average of $1,017 over MSRP, while luxury car buyers paid an average of $1,069 over MSRP. Honestly, that’s a tighter spread than I expected, although it’s too soon to say if it’s a sign of markups easing.
The good news is that supply issues seem to be easing slightly. Kelley Blue Book reports that dealerships are seeing on-the-lot inventory in the high 30 day range, up from the mid-30 day range KBB’s been seeing for most of the year. Not only is this a good thing for dealers as consumers may be hesitant to order a car without taking one around the block, it’s also a good thing for consumers as more inventory typically means more room for bargaining. Speaking of bargaining, it seems like some vehicles from American brands are actually coming down to just barely under MSRP.
New vehicles from Honda, Kia, and Mercedes-Benz all sold for between 6.5% and 8.7% over MSRP in June. Those from Buick, Lincoln, and Ram sold for an average of 1% under sticker.
Could this mean light at the end of the tunnel? I’m not so sure, but Kelley Blue Book’s notes about pricing on Buicks, Rams, and Lincolns will be something to keep in mind as the car market continues to change in the future.
Diess Out, Blume In At VW
A big shake-up happened at Volkswagen on Friday. CEO Herbert Diess has been given the boot in favor of Porsche CEO Oliver Blume, signaling a shift in corporate philosophy that could be a good thing or a bad thing depending on your perspective. See, Diess had grand plans for going all-in on electrification, cutting costs, and building out Volkswagen’s CARIAD software division. Unfortunately, some of those plans seem to have upset a lot of people. Sure, consumers are upset with touch-sensitive everything on the ID.4 and new GTI, but it might not just be consumers who are uneasy about Diess’ vision.
See, Diess’ singular vision was very much of shareholder value and electrified mobility, and Diess didn’t seem afraid to step on toes in pursuit of goals. Wait a second, isn’t this just a 21st-century twist on Ferdinand Piëch’s style? Well, that’s complicated. Piëch has a legacy of singular vision and authoritarianism, but also one of putting product first and cultivating allegiance with Volkswagen’s labor union. Plus, Piëch was family, and family holds a lot of sway at Volkswagen. In fact, the Porsche and Piëch families hold a majority position in Volkswagen, and there’s a good chance they fancied Oliver Blume’s leadership style. See, Blume seems to very much be a car person, nurturing the past while developing the future. Investments in synthetic fuels for classic Porsches and launch of the all-electric Porsche Taycan may offer a sense of where things might be going for Volkswagen. While the glorious product-first Piëch years are likely never to be repeated, it’ll be interesting to see how Blume implements changes at Volkswagen after he becomes CEO in September.
In addition, CFO Arno Antlitz will become Volkswagen’s COO, a reasonable move that gives hope for strong future products. Financial Times reported earlier this year that Antlitz has his sights set on more premium vehicles and margins over volume, which should hopefully rein in some model range cannibalization by way of planned product cuts.
Cupra Reportedly Eyeing America
Yes, we have more VW news. According to Australian publication Drive, Volkswagen’s Cupra brand may be considering entering the American market. Back up a second, what is Cupra? Well, if you’re American and read European car mags during the glory days of the aughts, you may remember the red hot Seat Leon Cupra R, a 207-horsepower rocket of a hot hatch. Well, Cupra’s been spun off into its own brand focused on performance electrification at a retail brand price point. If this all sounds like marketing drivel to you, picture Pontiac for a second. Wide track, supercharged 3800 blorgel-orgel exhaust notes, “We Build Excitement,” that sort of stuff. Indeed, Cupra brings a little excitement to mass-market electrified vehicles with models like the Formentor crossover, Born compact hatchback, and hot versions of the Seat Leon hatchback and Ateca crossover.
Anyway, Drive caught up with Cupra global boss Wayne Griffiths at the opening of a Cupra showroom in Sydney, where Griffiths shared some remarkable thoughts on the future of the Cupra brand.
“On top of that, obviously if you want to become a global brand – our reason for coming to Australia – is to prove that we can become a global brand.
“Then obviously you need to look at markets like North America, but that would only be in a second phase.”
Honestly, North America’s been lacking a retail-grade performance brand for a while now. Pontiac’s been dead for more than a decade, Mazda’s abandoned Zoom Zoom, and while Dodge makes some hot stuff, not everyone can afford a Scat Pack or Hellcat. Let’s see how the future of Cupra plays out and cross our fingers that the brand makes it to North America.
Eaton Plans Lockers For EVs
If you’ve ever owned a truck or SUV, you probably know about the importance of a locking differential. By locking the cross-axle torque split, you can move forward with one wheel off the ground, bog across mud, climb loose rocky terrain, and have clearance be your limitation rather than traction. However, electric vehicles have posed a strange problem for the locking differential. Not only do electric motors feature extremely high torque, electric drivetrains are extremely sensitive to friction. While Rivian seems to have a remarkable quad-motor solution, Automotive News reports that famed differential maker Eaton is hatching a plan to put more traditional locking differentials like its MLocker diff in electric vehicles.
Potential EV makers want the MLocker, but they need it to be lighter, more efficient and with less friction — which might sap battery range. Lubrication also is an issue. The differential normally gets a constant bath of axle lubrication — EV makers want lubrication to be sprayed on when necessary.
Honestly, I’m curious to see how spray-on differential lubrication goes. I wouldn’t be surprised if a lubricant thinner than common 80w90 and 75w140 differential oils is used, although a decrease in viscosity raises some durability concerns. Still, Eaton seems to have some very smart engineers on the case, as Mark Kramer, Eaton’s business director for ePowertrain told Automotive News.
“We have a dedicated team of engineers and we have a proving ground in Michigan,” said Kramer, who at 41 is younger than the product.
“We also have a team of engineers in South Korea, a team of application engineers in China and a team in Prague that does testing,” he said. “So we have global resources dedicated to this differential product line.”
Hopefully we’ll start to see locking differentials in EVs soon. Even after new trucks make the switch from fossil fuels to electricity, we shouldn’t have to compromise on the joy of off-roading.
The Flush
Whelp, time to drop the lid on this edition of The Morning Dump. Happy Monday, everyone. It’s the start of a new work week. To take your mind off of the Monday blues, how about we play a little bit of a game? Let’s say you’re given $48,043 tax-free to buy a brand new daily driver. You must use it as your primary vehicle year-round for five years. What are you buying? Honestly, this might sound a bit silly, but I think I’d go with a fully-loaded Toyota Prius Prime in the wonderful teal Toyota calls Blue Magnetism and the Moonstone faux-leather interior. I’d deck it out with rubber mats and paint protection film, then happily drive around on mostly electricity bumping tunes through the JBL audio system. Then again, you might have a much less sensible but far more entertaining pick, which is exactly why I want to hear from you.
Lead photo credit: yonkershonda, licensed under CC BY-SA 2.0
I’d buy the vehicle that we actually bought in early 2021 (luckily, at a time when prices were still well under MSRP rather than over): a Jeep Grand Cherokee Limited. “Daily driving” at this point is almost nil (hooray for permanent WFH), and 90% of the miles we’ve put on it have come on road trips where it’s a near-perfect vehicle for the drive. I do have some long-term reliability concerns but we intentionally bought what we thought was going to be the last year of the old one rather than the new redesign so hopefully that’ll help. Managed 24-25 mpg on the last couple road trips so while it still feels like a gas guzzler compared to the economy cars I’ve always driven, it’s not that bad (and without it we’d be renting something similarly sized for those trips anyway).
I think even now I’d have a little money left over from the $48k to put toward one of those trips, too.
I just spent my theoretical $48k at the start of the month – 2022 Colorado ZR2 diesel extended cab. With a supplier discount and after tax, title, license is came to a hair over $48k. Very happy with it so far, averaging upwards of 25mpg. Now if diesel prices could come down, that’d be great.
While a little over the $48k and used instead of new…My wife and I just purchased a 2021 Acura RDX PMC edition. 1 of 360 in thermal orange and hand built at the Acura performance manufacturing center alongside the NSX. It will probably be as closed as I ever get to owning an NSX; so I am really looking forward to picking it up this weekend.
48 large ; probably 1 week’s stay at the shelter. for the aged and mentally deficient where I will soon be.
No car for me.
Used Porsche 911 (997). It will be a little work to find a good used one at that price, but, doable.
“Let’s say you’re given $48,043 tax-free to buy a brand new daily driver.”
That’s a tough one, because I really, really want an ND Miata, but experience tells me that daily-ing the fun car is a good way to get disillusioned. So as a replacement for my Volt…hmm. There aren’t any new PHEVs/EREVs that give you the driving range of the Volt except the hideous Rav4. Maybe if Mazda ever built the EREV version of that MX-30 thing? 100 miles of electric range with a little rotary backup generator sounds pretty rad. Hopefully I’d have enough left over for a cheap fun car.
Local dealer had a couple id.4s on the lot for like $45k. That’s probably the way to go. Before gas got crazy Pacifica hybrids could be had new for low 40s, but nothing under $50k last I looked, which, considering what I’ve been hearing about recalls and reliability, is shocking
Easy choice bc we did just this in May before the interest hikes.
Ordered a 2022 Bronco Sport Badlands in January. With incentives and x-plan pricing. We got ours built our way for $37k out the door. Tank of a off roader for under $40k and got 1.9% for 60.
Same with my Arteon. Last October bought a $45k car for $40k. Put half down in equity and financed the remaining $20k for 0% for 72.
Car markets is hard to get deals , but I am proof it happens.
Honda Accord 2.0T Sport (especially in the gorgeous blue) and pocket the rest for the extra gas cost over my current car.
Y’know what? I’m going to go against the grain on so many levels and use my theoretical $48,043 on a Volvo S60. I like how they look and they’re probably not getting dealer markups.
If someone gave me forty-eight grand, there’s no way I’m spending it on a car. That much should just about cover the carport/shed/garage extension with rooftop patio that I envision in my head. I’d rather have 2 more covered parking spaces than another car.
You might have enough money left over for, say, a $2,000 1984 Honda Accord.
I’d get a 2022 Corolla hatchback manual if they’re still available to order, or perhaps a Chevy Spark 2LT in yellow with a sunroof and manual.
I could get both for that price 😀
I’m anxious to try the newest VW model, the Cupra Chabra. I hope it doesn’t suck.
Only if you’re a goat, or so I hear.
I daily a Prius right now (just hit 20k in less than a year since I bought it) and as a result I am 99% onboard with your suggestion. The 1% being the teal. I would take almost any color other than teal, but with 48k burning a hole in my pocket I should have no problem finding one in a color I like.
“Let’s say you’re given $48,043 tax-free to buy a brand new daily driver. You must use it as your primary vehicle year-round for five years. ”
For US$48,000, I would get a Kia EV6… the RWD ‘Wind’ version. Has more than enough range and space for me. And it beats out the Tesla Model 3 since the EV6 is a hatchback and the 3 isn’t. It also has more EPA-rated range compared to the Tesla for the same money.