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How many <$20,000 new cars do you think are sold every year? Only the very insignificant subcompact segment even has an average selling price in that range. Th

How many <$20,000 new cars do you think are sold every year? Only the very insignificant subcompact segment even has an average selling price in that range. The average selling price of new vehicles is nearly $40,000. There's a lot of room for today's "boring" EVs in the $40,000 segment. https://mediaroom.kbb.com/2020-01-03-Average-New-Vehicle-Prices-Up-Nearly-2-Year-Over-Year-in-December-2019-According-to-Kelley-Blue-Book https://mediaroom.kbb.com/2020-01-03-Average-New-Vehicle-Pri...

jandrese 7y ago
Depends if you include used car sales in that figure.
NikolaNovak 7y ago
Right, but... how many $1,000,000 dollar cars get sold with how many $20,000 cars, for "Industry Average" to be $40,000? :D I notice average for Honda, Kia, Nissan etc in your linked article is $30,000... and that's explicitly exclusive of incentives and whatnots. AND inclusive of their luxury brands (Lexus, Infiniti, etc). That leaves room for lots of $20k cars, given that each of the brands has luxury models skewing the average as well. It would be interesting to see either median, or # of cars in some representative brackets.
- nradov 7y ago
  In the US the median vehicle price is $36K. So few $1M supercars are sold that they have no impact on the median.
  - ggm 7y ago
    To have a median of $36K implies there are some pretty cheap cars out there. Say my $20,000 is hyperbole. What would be more reasonable? the median, or say.. $30,000? Why?
    - CydeWeys 7y ago
      $30k isn't the average either. The average is higher than the median value of $36k. You're confusing things by comparing one manufacturer to all auto sales. And I'd say, sort of definitionally, that the median is the most reasonable figure to use here, precisely because it excludes all those insanely expensive hypercars driving the average up.
      - ggm 7y ago
        ok. so instead of $20k, lets say $30k or $36k. If I translate that into AU$ the Tesla is $70k. Its twice that price on-road costs. its one and a half times the median wage in australia. I am sure the median car cost in Australia is nothing like that much compared to salary. Tesla cannot compete with 'boring' cars until it can deliver 'boring' prices. If the price in the USA is within reach of boring, great: Its not yet in the UK, or Europe, or most of Asia, or Australia or New Zealand. It requires substantial support in most economies, and there is no price support for EV in Australia right now.
        CydeWeys 7y ago
        Why are you comparing the median cost of a car sold in the US with the average Australian wage? If you want to make that comparison, go find the median cost of a car sold in Australia. Start making valid comparisons. Anyway, yes, it's true, EVs are not yet as cheap as the cheapest gasoline-powered cars. They're a lot closer over their lifetime in fuel and maintenance, but the up-front purchase cost is more for now. And yet they're selling like gangbusters, because people clearly want them, and the more they sell the more they can benefit from economies of scale and go further downmarket. Remember, the first Tesla targeted the expensive luxury market, and they've now managed to bring the price down by more than half. Just wait.
    - nradov 7y ago
      Sure there cars available in the US market for under $16K. So what? The reasonable price is different for every customer.
  - deleted 7y ago
    [deleted]
- antoncohen 7y ago
  For 2020 Honda only has a single model in the US that starts below $20,000, the Honda Fit. And that is only for some trim levels of the Fit. In 2019 Honda sold 35,414 Fits, out of 1,450,785 total Honda vehicles sold[1] (384,168 CR-Vs, 325,650 Civics, 267,567 Accords, being the top sellers). So roughly 2% of Honda vehicles sold in the US cost less than $20,000, and that is without taxes and other fees. The Ford F-150 is the best selling vehicle in the US, and the average transaction price of an F-150 (as sold) is around $50,000. New cars under $20,000 basically don't exist in the US. [1] https://carsalesbase.com/us-car-sales-data/honda/ https://carsalesbase.com/us-car-sales-data/honda/
  - delfinom 7y ago
    There's two statistics I really want to see when it comes to car sales that never get posted. 1. Average income of buyer vs car price 2. Average loan totals vs car price Because, I can tell you that those statistics will probably be absurdly horrifying. Best example is I was sitting in a dealer and the sales guy was guiding a buyer through getting 3 separate loans for a Honda minivan because the credit union and Honda Fiance deemed him uncreditworthy for one direct loan. And that was one of the many really disturbing things I've directly listened in to. Next recession is going to result in a complete implosion of the auto lending industry.
    - cheschire 7y ago
      Don't forget average length of loans too. A lot of people are using up to 8 year loans to spread the cost even longer. Incomes haven't kept up with car prices so the only way people have been affording the same types of cars is with extending the loan payback period and paying a lot more in interest. Great for banks though.
    - bonestamp2 7y ago
      > I can tell you that those statistics will probably be absurdly horrifying. Absolutely. I know a guy who runs a few dealerships and they don't even sell cheap cars yet they buy tons of leads each month for people with bad credit who want new cars. The leads cost $50-$150/each depending on how bad their credit is. So you know that those buyers are still buying brand new cars or they wouldn't keep buying these leads. Sure, there are people with bad credit who can afford these cars, but extenuating circumstances are not the majority. I know it's another anecdote, but from spending a lot of time on car forums, I can't count the number of discussions I've seen around what kind of car people think they can afford. There are people making $35k/yr buying $80k pickup trucks. I don't even know how that's mathematically possible unless they still live with their parents. Car loans are absolutely horrifying.
nl 7y ago
The Chinese and EU car markets sell vast numbers of <$20k cars
PopeDotNinja 7y ago
I've been in Europe since early December. There are a ton of cars here, and very few of them are flashy. Small, practical cars everywhere. Very popular models: Citrooen C3, Skoda Fabia, VW Polo, Renault Cool, Opel/Vauxhall Corsa, Honda Jazz, Seat Ibiza, Ford Fiesta, etc. In the USA we have companies like Ford saying they are going to stop making cars for the USA market. It wouldn't surprise me to here a European company say they'd only make a small range of practical cars. One big reason is a lot of the roads are too darn small for anything big & their isn't as much money sloshing around here. Smaller is how they roll (pun intended) here.
- modo_mario 7y ago
  Seems to be changing. At least here in Belgium SUV's, seem to be getting more and more common. It's definitely not a trend to be encouraged given our massive but still oversaturated roadnetwork & lack of parkingspace in the bigger cities but it's happening.
  - Symbiote 7y ago
    Indeed, the increase in SUVs in Europe has wiped out the CO₂ gains from increased engine efficiency. https://www.theguardian.com/environment/ng-interactive/2019/oct/25/suvs-second-biggest-cause-of-emissions-rise-figures-reveal https://www.theguardian.com/environment/ng-interactive/2019/...
  - alltakendamned 7y ago
    Many cars in BE are bigger than one would buy themselves because so many are company cars.
fxtentacle 7y ago
This article was about Tesla in the EU, and more specifically in Germany, where cheap SUVs start at €12,000. And where you can buy a family-friendly combi car for as low as €10k in new. So Tesla is exclusively in the top 5% premium segment here. Most normal people won't even consider a car for half that price.
- mprev 7y ago
  What family car can you buy in Germany for €10k? The bottom spec Dacia that is on the price list only so they can claim that as the entry point?
  - fxtentacle 7y ago
    You do a procedure called "re-import" to optimize taxes. With that, my sister bought her almost fully upgraded 7-seat Dacia minivan for roughly €10k. It does feel more like a workhorse than like a fancy toy, but you can nicely fit 2 parents, 2 grandparents, 3 kids, and enough luggage for a weekend trip in there.
- tyfon 7y ago
  If you want a family car in Norway be prepared to pay at least 3-400k NOK (€30-40k) after tax. A model 3 starts at 385k and is tax free. It's about the same price as an entry Toyota Avensis station wagon.
  - Symbiote 7y ago
    Norway is clearly an exception to the usual situation in Europe, due to the very high taxes on purchasing (registering) a car, and the exemption to that tax for electric cars. Denmark also has the tax, but much less (if any, I don't remember) exemption.
    - tyfon 7y ago
      The exception in Norway is really only the VAT (25%) which is still a lot. But they will never have the CO2/NOX/cylinder volume tax that the fossils have. The VAT might come in a year or two but not the pollution tax. And the pollution tax will increase until 2025 when the sale of new fossils will be banned. However the article claims that the model 3 came in third in all of Europe behind the Golf and Clio, so it's selling well all over Europe not just Norway and the Netherlands. Norway is actually a smallish market now compared to what it used to be in market share for EVs.
argonaut 7y ago
If you spend any amount of time perusing new car prices in the United States, it should be pretty clear that typical prices for economy sedan cars are around $22k-$30k, with $30k and more typically being the higher tier trims of economy sedan car models. So $40k is clearly not the right comparison. And it should be pretty obvious why that average is misleadingly high: it includes pickup trucks, minivans, vans, SUVs, and sports cars.

jandrese 7y ago

Depends if you include used car sales in that figure.

NikolaNovak 7y ago

Right, but... how many $1,000,000 dollar cars get sold with how many $20,000 cars, for "Industry Average" to be $40,000? :D I notice average for Honda, Kia, Nissan etc in your linked article is $30,000... and that's explicitly exclusive of incentives and whatnots. AND inclusive of their luxury brands (Lexus, Infiniti, etc). That leaves room for lots of $20k cars, given that each of the brands has luxury models skewing the average as well. It would be interesting to see either median, or # of cars in some representative brackets.

nradov 7y ago
In the US the median vehicle price is $36K. So few $1M supercars are sold that they have no impact on the median.
- ggm 7y ago
  To have a median of $36K implies there are some pretty cheap cars out there. Say my $20,000 is hyperbole. What would be more reasonable? the median, or say.. $30,000? Why?
  - CydeWeys 7y ago
    $30k isn't the average either. The average is higher than the median value of $36k. You're confusing things by comparing one manufacturer to all auto sales. And I'd say, sort of definitionally, that the median is the most reasonable figure to use here, precisely because it excludes all those insanely expensive hypercars driving the average up.
    - ggm 7y ago
      ok. so instead of $20k, lets say $30k or $36k. If I translate that into AU$ the Tesla is $70k. Its twice that price on-road costs. its one and a half times the median wage in australia. I am sure the median car cost in Australia is nothing like that much compared to salary. Tesla cannot compete with 'boring' cars until it can deliver 'boring' prices. If the price in the USA is within reach of boring, great: Its not yet in the UK, or Europe, or most of Asia, or Australia or New Zealand. It requires substantial support in most economies, and there is no price support for EV in Australia right now.
      - CydeWeys 7y ago
        Why are you comparing the median cost of a car sold in the US with the average Australian wage? If you want to make that comparison, go find the median cost of a car sold in Australia. Start making valid comparisons. Anyway, yes, it's true, EVs are not yet as cheap as the cheapest gasoline-powered cars. They're a lot closer over their lifetime in fuel and maintenance, but the up-front purchase cost is more for now. And yet they're selling like gangbusters, because people clearly want them, and the more they sell the more they can benefit from economies of scale and go further downmarket. Remember, the first Tesla targeted the expensive luxury market, and they've now managed to bring the price down by more than half. Just wait.
  - nradov 7y ago
    Sure there cars available in the US market for under $16K. So what? The reasonable price is different for every customer.
- deleted 7y ago
  [deleted]
antoncohen 7y ago
For 2020 Honda only has a single model in the US that starts below $20,000, the Honda Fit. And that is only for some trim levels of the Fit. In 2019 Honda sold 35,414 Fits, out of 1,450,785 total Honda vehicles sold[1] (384,168 CR-Vs, 325,650 Civics, 267,567 Accords, being the top sellers). So roughly 2% of Honda vehicles sold in the US cost less than $20,000, and that is without taxes and other fees. The Ford F-150 is the best selling vehicle in the US, and the average transaction price of an F-150 (as sold) is around $50,000. New cars under $20,000 basically don't exist in the US. [1] https://carsalesbase.com/us-car-sales-data/honda/ https://carsalesbase.com/us-car-sales-data/honda/
- delfinom 7y ago
  There's two statistics I really want to see when it comes to car sales that never get posted. 1. Average income of buyer vs car price 2. Average loan totals vs car price Because, I can tell you that those statistics will probably be absurdly horrifying. Best example is I was sitting in a dealer and the sales guy was guiding a buyer through getting 3 separate loans for a Honda minivan because the credit union and Honda Fiance deemed him uncreditworthy for one direct loan. And that was one of the many really disturbing things I've directly listened in to. Next recession is going to result in a complete implosion of the auto lending industry.
  - cheschire 7y ago
    Don't forget average length of loans too. A lot of people are using up to 8 year loans to spread the cost even longer. Incomes haven't kept up with car prices so the only way people have been affording the same types of cars is with extending the loan payback period and paying a lot more in interest. Great for banks though.
  - bonestamp2 7y ago
    > I can tell you that those statistics will probably be absurdly horrifying. Absolutely. I know a guy who runs a few dealerships and they don't even sell cheap cars yet they buy tons of leads each month for people with bad credit who want new cars. The leads cost $50-$150/each depending on how bad their credit is. So you know that those buyers are still buying brand new cars or they wouldn't keep buying these leads. Sure, there are people with bad credit who can afford these cars, but extenuating circumstances are not the majority. I know it's another anecdote, but from spending a lot of time on car forums, I can't count the number of discussions I've seen around what kind of car people think they can afford. There are people making $35k/yr buying $80k pickup trucks. I don't even know how that's mathematically possible unless they still live with their parents. Car loans are absolutely horrifying.

nl 7y ago

The Chinese and EU car markets sell vast numbers of <$20k cars

PopeDotNinja 7y ago

I've been in Europe since early December. There are a ton of cars here, and very few of them are flashy. Small, practical cars everywhere. Very popular models: Citrooen C3, Skoda Fabia, VW Polo, Renault Cool, Opel/Vauxhall Corsa, Honda Jazz, Seat Ibiza, Ford Fiesta, etc. In the USA we have companies like Ford saying they are going to stop making cars for the USA market. It wouldn't surprise me to here a European company say they'd only make a small range of practical cars. One big reason is a lot of the roads are too darn small for anything big & their isn't as much money sloshing around here. Smaller is how they roll (pun intended) here.

modo_mario 7y ago
Seems to be changing. At least here in Belgium SUV's, seem to be getting more and more common. It's definitely not a trend to be encouraged given our massive but still oversaturated roadnetwork & lack of parkingspace in the bigger cities but it's happening.
- Symbiote 7y ago
  Indeed, the increase in SUVs in Europe has wiped out the CO₂ gains from increased engine efficiency. https://www.theguardian.com/environment/ng-interactive/2019/oct/25/suvs-second-biggest-cause-of-emissions-rise-figures-reveal https://www.theguardian.com/environment/ng-interactive/2019/...
- alltakendamned 7y ago
  Many cars in BE are bigger than one would buy themselves because so many are company cars.

fxtentacle 7y ago

This article was about Tesla in the EU, and more specifically in Germany, where cheap SUVs start at €12,000. And where you can buy a family-friendly combi car for as low as €10k in new. So Tesla is exclusively in the top 5% premium segment here. Most normal people won't even consider a car for half that price.

mprev 7y ago
What family car can you buy in Germany for €10k? The bottom spec Dacia that is on the price list only so they can claim that as the entry point?
- fxtentacle 7y ago
  You do a procedure called "re-import" to optimize taxes. With that, my sister bought her almost fully upgraded 7-seat Dacia minivan for roughly €10k. It does feel more like a workhorse than like a fancy toy, but you can nicely fit 2 parents, 2 grandparents, 3 kids, and enough luggage for a weekend trip in there.
tyfon 7y ago
If you want a family car in Norway be prepared to pay at least 3-400k NOK (€30-40k) after tax. A model 3 starts at 385k and is tax free. It's about the same price as an entry Toyota Avensis station wagon.
- Symbiote 7y ago
  Norway is clearly an exception to the usual situation in Europe, due to the very high taxes on purchasing (registering) a car, and the exemption to that tax for electric cars. Denmark also has the tax, but much less (if any, I don't remember) exemption.
  - tyfon 7y ago
    The exception in Norway is really only the VAT (25%) which is still a lot. But they will never have the CO2/NOX/cylinder volume tax that the fossils have. The VAT might come in a year or two but not the pollution tax. And the pollution tax will increase until 2025 when the sale of new fossils will be banned. However the article claims that the model 3 came in third in all of Europe behind the Golf and Clio, so it's selling well all over Europe not just Norway and the Netherlands. Norway is actually a smallish market now compared to what it used to be in market share for EVs.

argonaut 7y ago

If you spend any amount of time perusing new car prices in the United States, it should be pretty clear that typical prices for economy sedan cars are around $22k-$30k, with $30k and more typically being the higher tier trims of economy sedan car models. So $40k is clearly not the right comparison. And it should be pretty obvious why that average is misleadingly high: it includes pickup trucks, minivans, vans, SUVs, and sports cars.