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Of course, I agree with your theory… at some point, demand (if the economic contraction continues any length of time) will see a reduction.

At this time, tho, I don’t think we’ve reached the intersection of the demand .vs. supply lines on the graph, although if things continue like they’re going, we’re definitely going to get there.

There’s still quite a bit of pent-up demand for new vehicles (ICE, Hybrid and EV units). Until that demand is reduced by a combination of folks eventually achieving the taking delivery of a new vehicle plus the reduction in demand due to economic contraction, the status quo remains.

It should also be noted that a market downturn often doesn’t affect all models equally. For example, back in the 1970’s during the OPEC oil embargo, many higher line vehicles (Cadillac, Lincoln, etc.) didn’t suffer the hits in demand nearly as severely as the more mainstream vehicles (Chevrolet, Dodge, etc.) saw.

If the consumer determines (either rightly or wrongly) that an EV, even selling at a premium, is the more economically centered choice for his/her needs, it’s quite possible that the demand for EVs actually increases, curating even more vehicle backlogs until production ramps up sufficiently.

Sometimes, these things go in unexpected directions.
 

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Discussion Starter · #43 ·
And such a pullback would cause downwards pressure on car pricing, and incentive to offer financing deals, thus improving our outlook. Ain't capitalism great?
Yes, that is what we would hope for. Unfortunately, there is no inventory to sell at a discount. And with much of the inflation now sticky, don't see pricing coming down anytime soon, actually the opposite for at least the next year. But if demand drops off due to the economy, that could at least allow some that do have money to move up the line a bit. I am seeing a little anecdotal evidence of that, but that seems to be more than countered by those that can and will buy at any price. What we need most is more supply, which doesn't seem to be happening.

In my case, I want an EV, not necessarily any EV. So far only the Solterra and Ioniq 5 qualify for me, although for different reasons. Once I get one, I can wait for the next one. My biggest regret is the early selling of my Kona EV this spring, after 3 years of wonderful use. It really was a good car, just not one that fits my long term. Meanwhile we have have to make do with sharing our Crosstrek, which is another good car for our needs, except that it is an ICE vehicle. Just hope that we don't have an accident, or need some major repair putting it out of service for a while. We would really be hooped then.
 

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Yes, that is what we would hope for. Unfortunately, there is no inventory to sell at a discount. And with much of the inflation now sticky, don't see pricing coming down anytime soon, actually the opposite for at least the next year. But if demand drops off due to the economy, that could at least allow some that do have money to move up the line a bit. I am seeing a little anecdotal evidence of that, but that seems to be more than countered by those that can and will buy at any price. What we need most is more supply, which doesn't seem to be happening.

In my case, I want an EV, not necessarily any EV. So far only the Solterra and Ioniq 5 qualify for me, although for different reasons. Once I get one, I can wait for the next one. My biggest regret is the early selling of my Kona EV this spring, after 3 years of wonderful use. It really was a good car, just not one that fits my long term. Meanwhile we have have to make do with sharing our Crosstrek, which is another good car for our needs, except that it is an ICE vehicle. Just hope that we don't have an accident, or need some major repair putting it out of service for a while. We would really be hooped then.
I agree I don't see prices coming down soon in the near future for EV's. Just this week (I'm in Oregon) I got an email from a local Hyundai salesman letting me know he had one white Ioniq 5 AWD SEL in-transit and I could have it with a $7,500 ADM. Another local VW dealership is offering a used 2021 ID.4 with 15K miles for $57K. Just two examples of in the last 48 hours that I came across.
 

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I agree I don't see prices coming down soon in the near future for EV's. Just this week (I'm in Oregon) I got an email from a local Hyundai salesman letting me know he had one white Ioniq 5 AWD SEL in-transit and I could have it with a $7,500 ADM. Another local VW dealership is offering a used 2021 ID.4 with 15K miles for $57K. Just two examples of in the last 48 hours that I came across.
MSRP in the auto industry is generally inflexible downwards. Prices don't need to come down for deals to start showing up -- low financing rates, rebates and incentives, etc.

Most importantly, though, while I don't see pent up demand for EVs slacking any time soon, softening of other segments of the market may ease upward pressure on interest rates, or even stert pulling them down again.
 

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Discussion Starter · #47 ·
More and more are forecasting recession next year. This is pretty serious. Last time the index was this bad was 2020 after the pandemic first hit. Before that was 2008/2009. It is a highly accurate and respected indicator of the state of the economy.
US Leading Indicators

And with higher interest rates coming, too now, hard to believe that won't cool demand somewhat.
 

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Discussion Starter · #48 ·
As expected, the feds just did another .75% interest rate hike. Another one coming in Dec, and expected to be .5%. Financing or leasing a car is continuing to become more expensive.
 
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