Current policy will put us back to a past when only the rich had cars. From Eric Peters at ericpetersautos.com:
If you were to go back in time 120 years, to the dawn of the Age of the Automobile, what you would see is that the automobiles of that age were few and expensive. Most were hand-built, to order (you may recall GM’s “Body by Fisher” badges; these were remnants of the coach-built era).
Anyhow, we’re almost there again.
While not coach-built, new vehicles are becoming so expensive again that – inevitably – only a few will be able to afford them, soon.
You may have heard that last year, the average price paid (the so-called “transaction price”) for a new vehicle was about $45,000 – an all-time high. It does not mean that one could not buy a new car for much less; it means that lots of people didn’t – chiefly because they could finance more car – which they could because of low interest rates. But interest rates are no longer low and headed higher; this will result in fewer people being able to finance – ending the fiction of affordability.
At the same time, there are fewer and fewer vehicles left that do not cost $45,000 – or a lot more.
Almost all of this is due to “electrification,” which is inherently expensive. The typical EV costs about $10,000-$15,000 more than an otherwise similar non-electric vehicle. Ford’s F-150 Lightning, for instance, stickers for $55,794 vs. $41,530 for the non-electric F-150 SuperCrew. It costs thousands more this year than it did last year.
Some EVs – like the Tesla Model 3 – sticker for twice what an otherwise similar compact-sized hatchback sedan such as the Honda Civic stickers for.
This will get worse, not better, as more high-cost EVs are force-fed into the mix – and fewer low-cost non-EVs are left, as alternatives to them.