interesting contrast…Lucid air inventory "deals"

[Archimedes]

Why is that flawed? Private party rarely sells for the retail price without a lot of effort and time, particularly on cars like these.

The vast majority of people buy retail price and sell wholesale price, so to them the depriciation of the asset is the money lost over that time frame.

Depreciation is the decline in value of the car. You can’t use retail value as one input and wholesale in as the other. The true depreciation is the decline in retail value. The fact that you choose to give away 10 percent of your car’s value to the dealer for convenience sake is not depreciation.

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[fullmetalbaal]

I have yet to see a Lucid charge with any urgency in the real world. It would appear that the cars they provided to journalists are ringers, because every journalist claims extremely high charging rates. Owners complain about the slow speed when I run into them at EV chargers. A few months ago, I ran into a Lucid owner frustrated that they couldn’t charge at any of the chargers at an EA location, despite those chargers working for other cars.

Lucid has received raves from journalists, but again, in the real world, I just don’t see it. Every one that I have seen looks janky from the build quality perspective.

Tesla grew its market share through a radical fan base. Lucid is basically run by Tesla alumni, but this product does not engender the same level of enthusiasm.

I have seen enough that I would not touch one at any price, at any discount. The only upstart EV maker with any credibility is Rivian. They have proven themselves and have sold a ton of trucks and SUVs.

Typical Silicon Valley "follower" case study. Hire some ex-<first mover> people and assume that magically the same growth will happen.

How many companies that are led by ex-google, ex-apple, ex-tesla, ex-spaceX leaders suddenly become leaders in that same field again?

IMHO just goes to show that, with the exception of 1-2 key leaders/visionaries (Jobs, and yes, Musk), many of the other people that were lucky enough to be part of the revolution early on actually had little actual causative contribution. Pulled out of that "right time, right place" environment, they are just the same as everybody else. And now they are competing against that OG player, and in this case also against all the established legacy OEM.

In Lucid's case, they aren't even trying to evolve the playbook (though they skipped the roadster chapter and went for the Model S chapter instead). "Tesla, now with Saudi money".

I'd short Lucid, except I don't invest that way.

 

[tigerbalm]

I enjoyed the "Tech Talks" series they did a while ago and liked that their CEO comes from the engineering side of the business and can talk in some detail about their product innovations.

The car's themselves look like hideous land yachts to me.

 

[daveo4EV]

good/excellent engineering (I like the talks also) hideous design…the two are not often so diametrically opposed in a single product - it's good example of why these two things are separate, but the best companies blend them to be seamless…


never short a company with infinite funding - the saudi's are unlikely to let it go under…

 

[whitex]

I think demand is softening substantially across the board.

You can pick up a Rivian off the lot / within 1 week if you're willing to go with existing inventory.
Both Lucid and Mercedes have some really good deals on financing, and Mercedes also gives you straight xxK off MSRP deals.
Porsche Bellevue seems to have over a dozen Taycan in inventory. There's also a longer list of used Taycan available in the area.

Tesla is also giving some nice incentives, though its hard to tease apart their usual end of quarter sweeteners from anything else.

This sounds negative, but I mean this in a positive way!
It's turning into a buyer's market - let's go hunting!

Audi is offering $12.5K factory cash for eTron GT's in addition to negotiating the price with the dealer (compare that to a year ago when dealers were asking for as much as $25K ADM). Mercedes has EQS'es in stock while a year and half ago they'd be shipping them to CA buyers with a hefty ADM's. Things are definitely slowing down. That said, I've talked with some sales guys who like to uphold the impression that the shortages and ADM's are still a thing. Some of them really try to stick to their story, until they realize you're willing to to a different dealer to purchase.

 

[whitex]

A review of cars.com shows the used price of a 2021 4S with low mileage and comparable options to mine indicates about 30% depreciation from 2021 list pricing. Not very comforting.

Don't panic. 2021 prices were an anomaly - in US used car prices were UP over 40% year-to-year! Once things come back to pre-pandemic levels, the decline will slow down. People will have to get used to the normal pricing, like car being worth 80% off MSRP the minute you drive it off the lot.

 

[Archimedes]

There’s a Lucid at my golf club. It’s hideous and cheap looking. As if a Russian car company tried to build a Mercedes and missed the mark.

 

[Deleted member 6348]

Audi is offering $12.5K factory cash for eTron GT's in addition to negotiating the price with the dealer (compare that to a year ago when dealers were asking for as much as $25K ADM). Mercedes has EQS'es in stock while a year and half ago they'd be shipping them to CA buyers with a hefty ADM's. Things are definitely slowing down. That said, I've talked with some sales guys who like to uphold the impression that the shortages and ADM's are still a thing. Some of them really try to stick to their story, until they realize you're willing to to a different dealer to purchase.

Raises megaphone…
“An ETron GT is not a Taycan. It is not made in the same factory as the Taycan. It does not drive like the Taycan. ETron GT demand is not Taycan demand.”

…that is all.

 

[whitex]

Raises megaphone…
“An ETron GT is not a Taycan. It is not made in the same factory as the Taycan. It does not drive like the Taycan. ETron GT demand is not Taycan demand.”

…that is all.

I was not suggesting it was. I was simply adding more information how the demand has softened across different manufacturers. There are however new and used Taycans for sale, vs. say 2 years ago when there was none, not even for a test drive.

 

[Jonathan S.]

I'm under the impression in North America you still have to wait to get a Taycan and sales are good…

but apparently they are not so much for Lucid (which is a car I simply don't understand or desire)

they are having a sale - 1% financing if you'll purchase an inventory model…

https://www.lucidmotors.com/stories/lucid-air-lease-loan-offers

even looking at the leases I wouldn't consider the Lucid - I don't like the styling and I don't think it's a quality product.

wow 1% loans in this environment reeks of desperation

if there was no Taycan I'd go back to a Model S before being forced to drive a Lucid Air.

Interesting that Lucid is also lowering the effective price this way instead of just lowering the effective price by ... lowering the price.
Tesla at least is up-front about its price decreases, but also get a lot of blowback from recent purchasers upon each round of price decreases (but also moves a lot of cars that way).

I did drive the AGT briefly when we happened to be at a town sustainability festival that had EV demos.
Although I don't care much for exterior styling in general, after thinking that the exterior looked kind of odd in pictures and videos, in person the exterior actually looks ... kind of odd.
Other aspects of the very short test drive were quite impressive for what it is, i.e., a big comfy luxury sedan EV. Some overlap with the Taycan target market, but not much. (Would be fun to draw a Venn diagram for this with Lucid, Taycan, Model S, and i7.)

 

[daveo4EV]

I still consider Lucid's strict "engineering" to be top flight - perhaps best in breed - but their design lacks a similar qualification in my opinion.

people wonder about the difference between engineering and design - and I've never seen a better contrast in production than Lucid - world class engineering (in a good way) couple with simply bad design choices…the best companies (Sony, Apple, Porsche, BMW etc…) they do both so well that it appears they are one in the same, but they are not.

Lucid is an example for all to see - some good, and some not so good - they success or lack there of is proving to be an excellent real world example in many dimensions.

 

[Jonathan S.]

Depreciation is the decline in value of the car. You can’t use retail value as one input and wholesale in as the other. The true depreciation is the decline in retail value. The fact that you choose to give away 10 percent of your car’s value to the dealer for convenience sake is not depreciation.

This reminds me of some of my disagreements with opposing economists in court cases when our divergent answers are based in turn on how we're actually answering different questions.

Or as one economist said in response to the charge question for an academic peer review on which I was assisting a federal gov't agency:
"This reminds me of a professor I had who would answer every question I asked him with, 'Here's the answer to the question you should have asked instead."

Seriously though (but all of the preceding was serious), nomenclature aside, both calculations are informative:

• Ratio of retail used to retail new informs the decision of a prospective purchaser (perhaps me, given ordering lead times) on whether to look seriously at used vs new.
• Ratio of retail wholesale to retail new (and also retail used) informs the decision of a prospective purchaser (ditto re me again) who plans to own the car for only around the warranty period (ditto), as opposed to running it into the ground, and cares about total lifetime cost of ownership (not me, since even a base 4CT is so financially unsound that the details don't concern me).

Based upon some searching of used listings, sure seems like the 4CT ratio is so high for the former that used makes more sense only if wanting to avoid the ordering lead times.

The latter ratio, based upon anecdotal evidence both here and at RennList, does some very low.
But that makes sense given how all the customization potential must be segmenting an already thinly traded market, especially for the 4CT.
(My reaction to many window stickers has been "huh, how could somebody include this but not that?" whereas the vast majority of 4CT owners would probably think exactly the same thing looking at my ideal build!)
Dealers must know that trying to sell it privately is going to take awhile. Look at the paucity of listings here, at the other Taycan forum, and AutoTrader etc. I've probably read more complaints about trade-in values than I have seen private seller listings!
By contrast, 4CT used listings at dealers seem to be hovering in the mid 90s with a few rare exceptions for real strippers. Maybe that will change soon if dealers get tired of waiting so long to sell these, if Tesla keeps discounting the Model S even further (don't worry, I'd never buy any Tesla, but still, it doesn't influence other EV pricing), and/or if Lucid starts getting desperate (or even more desperate than it already is).
I doubt the data are publicly available, but my hunch is that the 4CT has a far higher ratio of dealer listing price to trade-in offer as opposed to the e-tron GT.

 

[whitex]

This reminds me of some of my disagreements with opposing economists in court cases when our divergent answers are based in turn on how we're actually answering different questions.

Or as one economist said in response to the charge question for an academic peer review on which I was assisting a federal gov't agency:
"This reminds me of a professor I had who would answer every question I asked him with, 'Here's the answer to the question you should have asked instead."

Seriously though (but all of the preceding was serious), nomenclature aside, both calculations are informative:

• Ratio of retail used to retail new informs the decision of a prospective purchaser (perhaps me, given ordering lead times) on whether to look seriously at used vs new.
• Ratio of retail wholesale to retail new (and also retail used) informs the decision of a prospective purchaser (ditto re me again) who plans to own the car for only around the warranty period (ditto), as opposed to running it into the ground, and cares about total lifetime cost of ownership (not me, since even a base 4CT is so financially unsound that the details don't concern me).

Based upon some searching of used listings, sure seems like the 4CT ratio is so high for the former that used makes more sense only if wanting to avoid the ordering lead times.

The latter ratio, based upon anecdotal evidence both here and at RennList, does some very low.
But that makes sense given how all the customization potential must be segmenting an already thinly traded market, especially for the 4CT.
(My reaction to many window stickers has been "huh, how could somebody include this but not that?" whereas the vast majority of 4CT owners would probably think exactly the same thing looking at my ideal build!)
Dealers must know that trying to sell it privately is going to take awhile. Look at the paucity of listings here, at the other Taycan forum, and AutoTrader etc. I've probably read more complaints about trade-in values than I have seen private seller listings!
By contrast, 4CT used listings at dealers seem to be hovering in the mid 90s with a few rare exceptions for real strippers. Maybe that will change soon if dealers get tired of waiting so long to sell these, if Tesla keeps discounting the Model S even further (don't worry, I'd never buy any Tesla, but still, it doesn't influence other EV pricing), and/or if Lucid starts getting desperate (or even more desperate than it already is).
I doubt the data are publicly available, but my hunch is that the 4CT has a far higher ratio of dealer listing price to trade-in offer as opposed to the e-tron GT.

CT’s entered the market both much later than the sedan and in the middle of the pandemic supply-chain and shipping issues, resulting in very low volumes of CT’s in the US for the first little while - so much lower supply of used cars, no older options, resulting in higher resale. I also found anecdotally that CT allocations were in shorter supply at first than sedan (I was hunting nationwide for an allocation for over a year). That said, I’m still in a habit to checking new and used Taycan listings (after a long hunt for mine) and I noticed even used CT sales have slowed down vs a year ago (i.e. they sit longer, get discounted).

As for comparison of different pricing, if you want to see highest “depreciation” don’t just compate MSRP to trade-in, compare MSRP+tax+registration+interest on lease with $0 down, vs. cash (not buying new car) trade-in-value.

 

[Jonathan S.]

^ Interesting, thanks, the timing of the CT intro at the peak of the market can explain the reluctance of sellers to adjust prices down to the market-clearing level (a la the sunk cost fallacy).

As for taxes, I never used to pay much attention to MA state sales tax on cars despite having bought, let's see, I think 11 cars in this state since 1991, but now that I've been buying increasingly expensive cars, whoah, that 6.25% sure is a financial incentive not to switch cars frequently!

 

[Fish Fingers]

Off topic - but sort of relevant.....

I just read an article in the FT on Chinese car manufacturers and their desires to replicate in Europe what they have achieved at home. In a very short space of time.

This could be a huge gamechanger and disrupter to the established car industry, for better or worse.

What they have achieved in China in the last decade is remarkable.

Article here :
https://www.ft.com/content/fddc1c5b-7494-4f0c-94cd-0409d7e9df70

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