Data from Commerce Department, chart by Mish.
How Much of the Recent Surge is Real?The on X comments …
[NEWS] New vehicle inventory is surging 26.4% YoY: But demand is barely budging. Why? New car prices are stuck at elevated levels… For 13 straight months, new car list prices have hovered around $49K. And while sub-$30K vehicles are gaining traction, growing 51.8% YoY — They still account for only 13% of the market. Bottom line: Inventory is improving, but without meaningful price drops, demand will likely remain muted.
Q: Why does that matter?
A: The Commerce Department counts sales when they are shipped to dealers, not when actual consumers buy them.It more of the glorious accounting that we are accustomed to. But eventually those cars will have to be cleared. And the only way that will happen is with incentives.New Car Inventory SkyrocketsPlease consider .
Looking ahead: Electric vehicles continue to see the most volatility compared to other segments.
- New EV supply is up 35%, far more than the average for new cars and three times more than used EVs.
- But, while the market is dominated by new EV listings, used EVs are seeing most of the demand. Cars.com tracked 5.5 times the number of searches for preowned EV listings compared to new EVs.
- This makes sense, as used EV prices have declined sharply over the last year, falling 9.1%. Meanwhile, new EV prices are down only 1.9%.
Bottom line: While the market continues to shift due to various factors, the relationship between prices and demand is evident. Sellers seem to have found an equilibrium for now, but moving the needle forward will likely require an influx of cheap listings in the months ahead.
My Bottom LineManufacturers are losing record amounts of money producing EVs that few can afford.The Biden Administration, via EPA mandates, forced the manufacturers to make more EVs. And despite massive EV incentives, the cars are still not selling.Trump will soon trash these EPA mandates and get rid of the EV subsidies.Guess what will happen to new EV sales.April 11, 2024: April 26, 2024: May 14, 2024: August 10, 2024: August 21, 2024:
Chinese Automakers Are Far Ahead of USPlease read think of the the implications of this: Unless and until Trump reduces import tariffs (zero chance) or allows Chinese manufacturer BYD to build cars here (over the howls of Ford and GM), then consumers will be forced to overpay for cars.The difference between Biden and Trump is that under Trump you will at least have a choice between EV, ICE, and hybrids. And that choice will be without Biden’s distortionary incentives and EPA coercion. But you will still overpay, by a lot.So good luck with those new car sales.More By This Author:Retail Sales Better Than Expected With Big Upward Revision Rate Cut Odds Plunge As Powell Signals Willingness To Move Slower Producer Price Index (PPI) Increases 0.2 Percent, With Services Up 0.3 Percent
