(Above photo of a Nissan Leaf, a best-selling electric vehicle with a limited battery range)
Delaware’s auto rows have something we haven’t seen in a while – new autos, trucks, and SUVs.
Inventories vary. For example, on Cleveland Avenue in Newark, Toyotas seemed to be in short supply, while Jeeps were prominent at a nearby dealership.
It marks a turnaround from the pandemic or, as David Kelleher – a fixture on cable TV ads promoting his Chadds Ford, Ram-Jeep-Chrysler dealership – remembered in a Wall Street Journal (subscription) piece, “We had times where you could have a helicopter land on my lot. He cautioned that rising interest rates now call for focusing on sales rather than placing orders.
As inventories rise, there is speculation that manufacturers will order shutdowns of assembly plants to keep supplies in check. Stellantis, the oddly named automotive giant that owns Jeep, Ram, Peugeot, Fiat, etc, is idling a plant in northern Illinois and offering buyouts elsewhere, citing a changing market.
At the same time, customers get “car fever” this time of year, and having a vehicle on the lot is a big plus. It often leads to used car trade-ins, a major profit center.
Another uncertainty is how buyers will respond and the growing pipeline of electric vehicles headed for showrooms in the next couple of years. In Delaware, there’s a lot of noise surrounding Delaware’s proposed electric vehicle mandate in 2035. EV backers are worried that some of the politically charged myths surrounding the issue will stick.
Still, not every EV is flying off the lot, due to high prices, limited battery range, and a lack of public charging stations.
Tesla, which has numerous charging stations in Delaware, has cut prices by as much as 20%, with leases running slightly under $400 monthly. Whether that’s due to overproduction or Tesla CEO Elon Musk putting the screws to competitors like Ford is open to question. The discounting won’t make some Tesla owners happy after waiting a year for their vehicles and paying premium prices.
Also troubling to EV fans is Chevrolet discontinuing the boxy Bolt and substituting a more expensive electric version of its Equinox crossover.
Ford’s F-150 Lightning pickup remains in demand despite production glitches and the automaker adding more than $10,000 to its announced base price. Sales are coming from non-Ford owners, which may be OK with the Dearborn company, which makes a lot of money from gas-powered versions that will stick around another decade or so. Ford also eliminated waiting lists, which some view as a sign of softer demand.
Manufacturers say battery ranges will increase, and costs will come down as more vehicles roll off more efficient assembly lines geared toward electrics Sales should be aided by up to $10,000 in state and federal tax credits and rebates. The biggest incentives are limited to a current handful of brands built in North America, although a loophole exists on leases.
Tesla may have cracked that code on the cost side, although its future is clouded by the lack of a long-promised pickup truck or a crossover SUV that resembles current hot sellers. It does tout one of its models as an SUV, although it has a car-like appearance and wouldn’t look right at the beach.
Meanwhile, hybrids with battery power and a smaller engine are hard to find, especially when it comes to SUVs. The Maverick, a small hybrid Ford pickup truck, is sold out again.
With more inventory on lots, will dealers pull back on orders, and will interest rates and economic uncertainties keep buyers away? Or will they bring back the inflatables, Trunk Monkeys, and discounts? We’ll know more in the coming months. – Doug Rainey, chief content officer.