IS THE AUTO INDUSTRY PRICING THE MIDDLE-CLASS OUT OF THE NEW CAR MARKET?

EV Channels Review

This episode of Autoline After Hours tackles the critical issue of new car affordability, featuring insights from Kristin Dziczek (Federal Reserve Bank of Chicago), Jeff Schuster (LMC Automotive), Gary Vasilash, and John McElroy. The panel agrees that the auto industry is in an unprecedented state, moving from "cautious optimism" to "cautious chaos" due to lingering supply chain disruptions, inflated prices, and changing consumer behavior. A key takeaway is that the new car market has shrunk, and may not return to pre-pandemic volumes, leading to higher used car prices and prolonged vehicle ownership. The average new car price is rapidly approaching $50,000, requiring 42 weeks of average household income to purchase, a stark contrast to historical affordability. While the industry is investing heavily in EVs, concerns remain about the pace of consumer adoption, infrastructure readiness, and the profitability of EVs compared to high-margin ICE vehicles. The discussion highlights the complex balancing act automakers face in transitioning to EVs while managing current profitability and potential overcapacity.