Top stories of the week: June car sales estimates, EV vs. ICE quality, summer gas prices

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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. U.S. car sales expected to hold steady in June

New vehicle sales are expected to stay pretty flat in June, likely wrapping up the second quarter on a high note despite a major last-minute disruption.

So, what does this mean? Well, car sales have been slowly but steadily rising in 2024, thanks to better supply and the return of incentives. However, affordability issues are still putting a cap on demand.

Now, let's look at the numbers. Different platforms have varying predictions, but any changes in sales compared to last year are expected to be minor. J.D. Power predicts new vehicle sales will be between 1.34 million and 1.27 million units, which is a drop of 2.6% to 7.2% from June 2023. Meanwhile, Cox Automotive forecasts a rough monthly sales volume of 1.39 million units, which would be a slight increase of 0.4% year-over-year.

Why does this matter? These numbers suggest the market is stabilizing, but new vehicle sales are still facing several hurdles. High interest rates and low loan approval rates, especially in the non-prime segments, are continuing to deter potential car shoppers.

Yet, car drivers are finding some budget relief at the pump. Typically, gas prices skyrocket in summer due to a jump in demand, driven by vacation plans. This year, however, is different.

2. Gas prices break summer patterns

According to federal data, gas prices are down this month compared to both last year and last month.

So, why does this matter? Lower gas prices usually mean people aren’t driving as much since demand typically drives costs up. With inflation and high interest rates, folks are cutting back on non-essential spending, which likely includes travel.

Yes, it's also worth noting that it's an election year.

How does this affect car demand? We’ve already seen a trend away from bigger, gas-guzzling models over the past few years. With people driving less now, this shift is likely to continue as consumers focus on saving money at the pump.

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While EV owners don’t have to worry about the volatility of gas prices, there are concerns about the overall quality of electric cars.

3. EVs rank far below ICE in latest vehicle quality study

Quality is on the decline again: Over the past few years, the overall quality of cars has worsened, with the average number of problems per 100 vehicles (PP100) jumping by a record 30 points between 2021 and 2023, according to J.D. Power.

EV vs ICE: While it’s true that EVs generally need less maintenance than gas-powered cars, both EVs and hybrids require repairs three times more often than other cars. In terms of overall quality, EV models are lagging behind ICE vehicles, with an average of 266 PP100 compared to 180 PP100.

Why does this matter? Cars are becoming more sophisticated and digitally reliant, replacing many mechanical functions and controls with software. This rapid change has left many drivers struggling with issues ranging from unreliable infotainment systems to inaccurate driver-assistance features.

Luckily for EV owners, battery replacement is pretty rare, even for high-mileage vehicles. But if you do end up having to replace your battery, there are some positive cost trends to note.

4. EV battery replacements: How often and how much?

Replacing an EV battery can be pretty pricey, ranging from $6,000 to $20,000 according to Recurrent, a startup focused on analyzing and providing reports for EV batteries.

But the good news is most EV drivers, especially the ones with newer cars, probably don’t have to worry about it. Only 2.5% of the EV owners in Recurrent’s study needed a new battery, and most of those were driving older models. As battery tech keeps getting better, this number might drop even further.

What’s more, the cost of replacing an EV battery has been going down. Back in 2019, replacing a 100 kWh battery pack cost about $16,100, 16% cheaper than in 2007. If this trend continues, by 2025, costs could drop to just $5,600.

But whether it’s an EV or an ICE vehicle, the majority of car owners do agree on one thing: the right to privacy.

5. Consumer data privacy concerns mount for connected cars

Connected cars, essentially vehicles hooked up to the internet, are designed to boost performance and offer tailored services. However, this convenience brings a slew of privacy concerns.

By the numbers: A recent survey of 1,300 people revealed that 96% of consumers believe they should own and control any data their cars generate. Additionally, 78% feel uneasy about automakers collecting driver data at all.

What's more: The Mozilla Foundation, a global non-profit focused on digital privacy, labeled all 25 automakers it studied as privacy risks. In fact, it found that cars are the worst product category for privacy.

Bottom line: While automakers can make billions from data monetization, they risk losing customer trust and brand loyalty.

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

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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