One of the issues that will soon get me thrown out of the mainstream automotive media forever is my love for minimalism.
I'm not talking about a basic no-frills car. Or a general rejection of cars in favor of more environmentally sound alternatives.
For me it's all about buying cars. I believe the way most non-enthusiasts can get ahead when it comes to cars is to buy as few of them as possible, and keep holding them for as long as possible.
It's a lot like investing in the stock market. The fewer the transactions and the greater that powertrain is produced and improved on, the better the opportunity to get ahead when it comes to long-term costs and personal satisfaction.
Let me give you a personal example. When I was 21 years old, I managed to buy my first and only brand new car thanks to a windfall of profits on Chrysler stock. It was a red 1994 Toyota Camry coupe. I ended up maintaining it as well as possible and doing all the things many of us here already do when it comes to upkeep. The difference?
I didn't do it because I wanted to focus on cars in the near future.
My goal was to keep it for as long as possible and then, if I got the chance, I would also buy a 1st gen NA Mazda Miata. Those would be my only two cars for the rest of my life.
Would I have been happy 20 years later? Probably. That 1994 Toyota Camry is still on the road today with nearly 400,000 miles on it. One of the owners after it was sold decided to lop off about 200,000 miles from the odometer and reset it for 350,000 to 150,000 miles. When I finally could afford a Miata, I absolutely loved it. I loved the idea of being able to customize and upgrade it as time went on.
I know I started out as an extreme outlier, but high prices, higher interest rates, and the economics of EV ownership are changing the winds of what consumers now want. I think we're now headed for a period where automobiles will become durable goods. Instead of being owned and maintained for years. They will be kept for decades on end. I see two market forces guiding this transition.
The first is that the best chance Tesla has for dominating the car market is to eliminate the need for their owners to buy another vehicle from anyone else, and the best way to differentiate themselves beyond their current image is to offer cars that will last 300,000 to 550,000 miles which is what they already do with their late-model vehicles.
If a car can last that long, you, as someone who isn't into cars in general, you already know that manufacturer is capable of cementing a long-term relationship with your needs IF you aren't really that much into cars. It becomes the easy choice for the non-enthusiast. Just like nobody got fired for buying an IBM from the 1960s thru 1980s, and buying a Toyota usually comes down to a desire for reliability above all else, a late-model Tesla EV is already engineered for longevity and most major automakers will be follow down that exact path of rivaling durability whether they like it or not.
The other change that will gradually happen is that cars, and especially EVs, will eventually become a lot more modular than they are right now. Precious few non-enthusiasts ever bother to do more than just add a nicer radio into this car. Tomorrow's vehicles will allow for a lot more modularlity and change with the software, hardware and the interior of the automobile. EVs are far easier to make and with the powertrain tucked away underneath, the automakers will have a broader palette for customizing and upgrading their cars and trucks.
For right now, automakers want to monetize their vehicles these days by offering monthly subscriptions and getting their customers to finance for as long as possible. I think both models will fail. What will succeed are upgrades and improvements that can be offered over the course of time. The two-row crossover that can have an added third-row installed. Or captain's chairs, upgraded interior seats, dashboard materials and door panels. Upgraded entertainment packages. Improved software that can offer unique features and benefits.
If I can make my older car feel and drive like new for a lot less money than a new car, why would I bother getting rid of it?
I have worn a lot of hats over the years when it comes to the car business. Auto auctioneer. Dealer principal. Analyst. Remarketing manager. Part-owner of an auto auction. The main stumbling blocks I think most mainstream media sources can't fully understand or even accept is that most consumers don't want to be perpetual debtors. They want to be owners. BUT they still want to have that upgrade opportunity whenever that time comes.
I see this as the future for the bulk of the auto industry. Ownership. Durability. Customization that is offered by the manufacturer which trumps the need for a brand new model, and the car becoming a durable good instead of a consumable one.
I disagree with pretty much all the mainstream automotive editors and marketeers. and that's fine. They couldn't comprehend GM going bankrupt until it already happened, and they ignored Tesla's rise until their valuation went far beyond any other automaker.
Once Tesla can build EVs in the $30,000 to $35,000 range with a $7,500 rebate thrown on top, that seven year payment really only amounts to $380 a month if you assume $5,000 down and an 8% interest rate. Nearly four months of those payments every year will come from saved gas costs which will minimize repossessions. The lack of depreciation for certain EVs due to their high demand, will also favor these vehicles even more in the marketplace. This will happen for the leaders of the EV market, not everyone.
I see our industry changing this way. This may take 10 or 15 years, but we're already on the road.
I'm not talking about a basic no-frills car. Or a general rejection of cars in favor of more environmentally sound alternatives.
For me it's all about buying cars. I believe the way most non-enthusiasts can get ahead when it comes to cars is to buy as few of them as possible, and keep holding them for as long as possible.
It's a lot like investing in the stock market. The fewer the transactions and the greater that powertrain is produced and improved on, the better the opportunity to get ahead when it comes to long-term costs and personal satisfaction.
Let me give you a personal example. When I was 21 years old, I managed to buy my first and only brand new car thanks to a windfall of profits on Chrysler stock. It was a red 1994 Toyota Camry coupe. I ended up maintaining it as well as possible and doing all the things many of us here already do when it comes to upkeep. The difference?
I didn't do it because I wanted to focus on cars in the near future.
My goal was to keep it for as long as possible and then, if I got the chance, I would also buy a 1st gen NA Mazda Miata. Those would be my only two cars for the rest of my life.
Would I have been happy 20 years later? Probably. That 1994 Toyota Camry is still on the road today with nearly 400,000 miles on it. One of the owners after it was sold decided to lop off about 200,000 miles from the odometer and reset it for 350,000 to 150,000 miles. When I finally could afford a Miata, I absolutely loved it. I loved the idea of being able to customize and upgrade it as time went on.
I know I started out as an extreme outlier, but high prices, higher interest rates, and the economics of EV ownership are changing the winds of what consumers now want. I think we're now headed for a period where automobiles will become durable goods. Instead of being owned and maintained for years. They will be kept for decades on end. I see two market forces guiding this transition.
The first is that the best chance Tesla has for dominating the car market is to eliminate the need for their owners to buy another vehicle from anyone else, and the best way to differentiate themselves beyond their current image is to offer cars that will last 300,000 to 550,000 miles which is what they already do with their late-model vehicles.
If a car can last that long, you, as someone who isn't into cars in general, you already know that manufacturer is capable of cementing a long-term relationship with your needs IF you aren't really that much into cars. It becomes the easy choice for the non-enthusiast. Just like nobody got fired for buying an IBM from the 1960s thru 1980s, and buying a Toyota usually comes down to a desire for reliability above all else, a late-model Tesla EV is already engineered for longevity and most major automakers will be follow down that exact path of rivaling durability whether they like it or not.
The other change that will gradually happen is that cars, and especially EVs, will eventually become a lot more modular than they are right now. Precious few non-enthusiasts ever bother to do more than just add a nicer radio into this car. Tomorrow's vehicles will allow for a lot more modularlity and change with the software, hardware and the interior of the automobile. EVs are far easier to make and with the powertrain tucked away underneath, the automakers will have a broader palette for customizing and upgrading their cars and trucks.
For right now, automakers want to monetize their vehicles these days by offering monthly subscriptions and getting their customers to finance for as long as possible. I think both models will fail. What will succeed are upgrades and improvements that can be offered over the course of time. The two-row crossover that can have an added third-row installed. Or captain's chairs, upgraded interior seats, dashboard materials and door panels. Upgraded entertainment packages. Improved software that can offer unique features and benefits.
If I can make my older car feel and drive like new for a lot less money than a new car, why would I bother getting rid of it?
I have worn a lot of hats over the years when it comes to the car business. Auto auctioneer. Dealer principal. Analyst. Remarketing manager. Part-owner of an auto auction. The main stumbling blocks I think most mainstream media sources can't fully understand or even accept is that most consumers don't want to be perpetual debtors. They want to be owners. BUT they still want to have that upgrade opportunity whenever that time comes.
I see this as the future for the bulk of the auto industry. Ownership. Durability. Customization that is offered by the manufacturer which trumps the need for a brand new model, and the car becoming a durable good instead of a consumable one.
I disagree with pretty much all the mainstream automotive editors and marketeers. and that's fine. They couldn't comprehend GM going bankrupt until it already happened, and they ignored Tesla's rise until their valuation went far beyond any other automaker.
Once Tesla can build EVs in the $30,000 to $35,000 range with a $7,500 rebate thrown on top, that seven year payment really only amounts to $380 a month if you assume $5,000 down and an 8% interest rate. Nearly four months of those payments every year will come from saved gas costs which will minimize repossessions. The lack of depreciation for certain EVs due to their high demand, will also favor these vehicles even more in the marketplace. This will happen for the leaders of the EV market, not everyone.
I see our industry changing this way. This may take 10 or 15 years, but we're already on the road.
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