EV market wins and losses, negative vehicle equity escalates, Hyundai slapped with lawsuit

Hey, everyone. Get this — car buyers can now lease a 2023 Ford F-150 Lightning for just $1 more a month than the entry-level Maverick (in certain markets). You heard that right…$1.

Even though the Lightning costs double what the Maverick does, crazy incentives this month from Ford have made this lease deal too good to pass up for many.

—CDG

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Each week, I curate the top 5 automotive industry headlines based on the topics CDG readers engaged with the most on social media. Let’s get started.

1. EV charging network expands despite public doubts

The race to build more charging stations is heating up. 

Driving the news: There are now more than 183,000 publicly available charging ports across nearly 50,000 stations, according to the Joint Office of Energy and Transportation.

• That’s an increase of more than 13,000 ports in the last three months.

• Compared to 2021, this number has almost doubled.

Why it matters: The public is demanding a more capable and extensive EV charging network. Traditional OEMs are chomping at the bit to access Tesla's Supercharger network, and the industry is accelerating toward a standardized charging system. In theory, unifying the EV charging network could lower anxiety among buyers and potential adopters. Remember when Apple ditched the lightning cable for a USB-C? Same idea applies.

But will it translate into sales? For many car buyers, their purchases typically boil down to one thing: price.

2. New car prices continue downward trajectory, EVs buck trend

By the numbers: For 9 consecutive months, new car prices have been declining. In June, the average transaction price (ATP) for a new vehicle in the U.S. was $48,644 – $266 less than in May and $307 lower than a year ago, according to Cox Automotive.

The intrigue: Even though the average new car in the U.S. costs around $49,000, many sold for much less.

• Over 40% of new vehicles sold in June went for under $40,000, and a quarter (26%) landed between $30,000 and $40,000.

• Half of the top ten best-selling cars in June were priced below $40,000, including the Toyota RAV4, Honda CR-V, and Toyota Camry to name a few.

On the other hand, would-be new EV buyers are facing higher ATPs ($56,371) month-over-month after hitting a low in February ($52,314). But the Tesla Cybertruck, with its $112,696 price tag, skewed the average higher.

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Despite higher average transaction prices, the EV market is actually getting more affordable in some ways…

3. EV affordability gap shrinks, buyer interest grows

A surge in affordable EV trims and new products has given 55.7% of mainstream car buyers a viable EV option, according to J.D. Power’s June E-Vision Intelligence report.

Why it matters: EVs are becoming a more realistic option for everyday drivers as the affordability gap shrinks.

• The average mainstream EV is now just $1,500 more than its gas-powered counterpart. This is down from a hefty $8,400 difference in May 2023. 

• In some cases, EVs are even cheaper. For example, the Ford F-150 Lightning (with tax credits) undercuts the gas-powered F-150 by $5,073.

The tipping point? High-end luxury EVs were the first to hit the market, but now they’re facing competition from a new wave of affordable, everyday electric cars. As prices continue to drop, this could be just the nudge potential EV buyers need to make the switch.

But there is a concerning trend lurking beneath the surface that could be holding all buyers back…

4. Negative vehicle equity on the rise: debt hits new record

While there was a period when used car values were on the rise, the pendulum is now swinging back toward a more normal state, leaving owners who purchased a new car during the pricing peak in hot water.

By the numbers: According to Edmunds, 23.9% of new car purchases involving a trade-in had negative equity in Q2. This is the highest level since Q2 2021 when 31.9% of buyers were upside down on their loan.

What’s more: The amount of debt being carried by these buyers is substantial. Car owners with upside-down loans owed an average of $6,255 last quarter, a new record and $1,000 higher than in Q2 2019 ($5,317).

The EV anomaly: There’s a huge difference in debt between gas-powered and electric vehicle owners. Buyers who traded in an EV in Q2 owed $10,326 on their loan, almost $4,000 more than the average and almost double the levels seen two years ago.

But despite this, new EV sales hit a record in Q2. Automakers like Hyundai reported a 15% increase in EV sales year-over-year. But get this — a new lawsuit claims Hyundai’s numbers are bogus…

5. Hyundai faces EV challenges including a new lawsuit

Questions raised: Hyundai’s EV sales count, while still impressive, has also been called into question, not by competitors but by its own dealers.

What’s happening: Several Illinois dealers are suing the automaker, alleging that it encouraged franchises to artificially inflate electric car sales numbers.

• According to the lawsuit, dealers were encouraged to boost their EV sales by using inventory codes meant for loaner vehicles.

• Those who agreed would receive special discounts and extra inventory while those who refused were supposedly denied benefits.

Of note: Napleton Aurora Imports has an interesting legal history with Hyundai, stemming from an alleged sexual battery at one of its storefronts.

Bottom line: In this case, Hyundai is innocent until proven guilty. Nevertheless, the suit raises questions about the brand at a critical time for its image.

That’s a wrap for now – make sure you’re following along on X, LinkedIn and IG for more real-time updates.

We’ve got tons of great jobs hitting the CDG Job Board right now. Here are some standouts for anyone looking for their next move.

• Want to take your auto sales experience to the next level? Ron Marhofer Auto Family is looking for a general sales manager near Akron, OH.

• Are you a B2B sales pro? Edmunds is looking for an account executive located in Riverside, CA.

• Have a knack for helping businesses grow? OPENLANE is seeking 10 market sales managers all across the country.

Looking to hire? Add your roles today—it’s 100% free.

Thanks for reading. Hit reply and let me know if you found this week-in-review valuable or have any feedback. I’ll see you next weekend.

—CDG

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