4 ms·

2024 cars are going to be so cheap, imagine if that's the cause/effect that made EV cars finally affordable.

bhouston 5y ago
I think that the components being hoarded have little effect on the final car price, but are critical to the car working -- e.g. required but not sufficient. These are like $0.50 microcontrollers or similar. I think there isn't a bullwhip effect on batteries, which is the main cost associated with TVs.
- regularfry 5y ago
  Used car prices probably will collapse, though.
  - Spooky23 5y ago
    Used car lenders will collapse. The 72 month loan for a $50,000, 2019 F-250 will be completely underwater, and the car owners may decide to literally send the cars “underwater” to get out of the loans.
    - thechao 5y ago
      This doesn't sound right? I thought the value of the collateral had no bearing on the loan, except as a condition for the lender to call the loan if the collateral loses too much value?
      - Spooky23 5y ago
        If a person owes $40k on an asset worth $30k, why would they keep paying? Based on what happened in places like California with mortgages, they will default one way or another.
        ahtihn 5y ago
        Defaulting has a cost though. If you default on your car loan, how likely is it that you're getting a loan for the next car? What kind of interest rate are you going to get?
        Spooky23 5y ago
        Depends. You can get a mortgage with a modest premium a year or two out of Chapter 13 bankruptcy.
        Scarblac 5y ago
        In Europe at least, they'd still be on the hook for the rest.
Robotbeat 5y ago
This seems trite, but the reason EVs aren’t affordable now is that not enough are being produced to satisfy demand. The actual cell cost (not price) is crazy low, like under $80/kWh for the LFP type cells in the base Model 3. But the price goes higher because demand is so incredibly high, even though Tesla is making 1 million EVs per year and growing rapidly year on year. Used EVs used to be pretty dang affordable already (I got a Leaf and a Volt for under $10k each) before all used cars became more expensive and the price of gasoline increased, increasing the demand for EVs. It’s just about scaling up production.
- Terry_Roll 5y ago
  China is turning out so many EV cars, dealers are buying back old one's to keep the price up. This is what BMW did (and possibly other German car manufacturers), in the late 80's/90's. Another thing I see China doing, is pegging their currency to the dollar, now when the UK did this to the stronger German Deutsche Mark, the UK under Lord Norman Lamont crashed out of the Exchange Rate Mechanism and the UK saw interest rates hit 12/13% so I wonder if this chip shortage has more to it other than investment reasons only?

I think that the components being hoarded have little effect on the final car price, but are critical to the car working -- e.g. required but not sufficient. These are like $0.50 microcontrollers or similar. I think there isn't a bullwhip effect on batteries, which is the main cost associated with TVs.

regularfry 5y ago
Used car prices probably will collapse, though.
- Spooky23 5y ago
  Used car lenders will collapse. The 72 month loan for a $50,000, 2019 F-250 will be completely underwater, and the car owners may decide to literally send the cars “underwater” to get out of the loans.
  - thechao 5y ago
    This doesn't sound right? I thought the value of the collateral had no bearing on the loan, except as a condition for the lender to call the loan if the collateral loses too much value?
    - Spooky23 5y ago
      If a person owes $40k on an asset worth $30k, why would they keep paying? Based on what happened in places like California with mortgages, they will default one way or another.
      - ahtihn 5y ago
        Defaulting has a cost though. If you default on your car loan, how likely is it that you're getting a loan for the next car? What kind of interest rate are you going to get?
        Spooky23 5y ago
        Depends. You can get a mortgage with a modest premium a year or two out of Chapter 13 bankruptcy.
      - Scarblac 5y ago
        In Europe at least, they'd still be on the hook for the rest.

Robotbeat 5y ago

This seems trite, but the reason EVs aren’t affordable now is that not enough are being produced to satisfy demand. The actual cell cost (not price) is crazy low, like under $80/kWh for the LFP type cells in the base Model 3. But the price goes higher because demand is so incredibly high, even though Tesla is making 1 million EVs per year and growing rapidly year on year. Used EVs used to be pretty dang affordable already (I got a Leaf and a Volt for under $10k each) before all used cars became more expensive and the price of gasoline increased, increasing the demand for EVs. It’s just about scaling up production.

Terry_Roll 5y ago
China is turning out so many EV cars, dealers are buying back old one's to keep the price up. This is what BMW did (and possibly other German car manufacturers), in the late 80's/90's. Another thing I see China doing, is pegging their currency to the dollar, now when the UK did this to the stronger German Deutsche Mark, the UK under Lord Norman Lamont crashed out of the Exchange Rate Mechanism and the UK saw interest rates hit 12/13% so I wonder if this chip shortage has more to it other than investment reasons only?