Understanding New vs. Used EV Values and Market Trends with John Murphy

EV Market Dynamics and Tax Incentives

• 💡 The $7,500 tax incentive significantly impacts EV pricing, making them appear $7,500 more expensive when it expires or is not applied.
• ⚠️ A major gap is opening between new and used EV prices, with a 15% difference now observed, potentially leaving early EV adopters significantly underwater.

Depreciation and Residual Values

• 📉 Tesla's overall depreciation is dramatic and has been predicted, with no other brand currently experiencing larger depreciation.
• 🌏 In the Chinese market, EV residuals are significantly lower than standard vehicles, ranging from 20-30% compared to 50-60% for traditional cars.

EV Penetration Projections

• 📉 John Murphy agrees with Ford's projection that EV market share could decrease, potentially falling to 5% or even lower, down from last year's 8% penetration.
• 🤔 This projection is influenced by the removal of incentives and the higher price point of EVs, especially if automakers pass on costs to consumers.

Future Growth and "Model Y Moment"

• 🚀 For brands like Rivian, future growth is anticipated around 2026-2027 with the launch of less expensive models priced below $50,000.
• 🎯 The "Model Y moment" refers to a point where a vehicle achieves escape velocity, potentially leading to profitability, a concept Rivian hopes to achieve with its mass-market crossover.