Vehicle Subscriptions Work to Prove Worth in a Sink or Swim Market
The vehicle subscription market is not dead, but its pulse is weak. Subscription programs offering by-the-month vehicle access made a big splash when they first arrived and tried to shake up the leasing market. None, however, had a widespread impact in the U.S. Now, the few startups and programs still in operation are trying to find the right pricing and logistical models to survive. "There are very specific use cases that do work, but I don't think it is a high volume" model, Ken Sopp, president of Credit Union Leasing of America, told Automotive News. Getting the subscription model right is tough; it is capital-intensive and asset-heavy with tight margins. But subscription providers such as Autonomy are working to gain a foothold in the U.S. And automakers such as Porsche, Volvo, and Hyundai offer subscriptions in select locations. Vehicle subscriptions typically work as an open-ended lease with a set monthly payment and sometimes money down upfront. The customer has control over how long they keep the vehicle and can often turn it in at any time. Click here for the full story.
Coalition Launches to Expand Electronic Vehicle Title and Registration Process
A newly formed coalition that boasts online used-car retailer Carvana and the National Automobile Dealers Association among its members is working to modernize the vehicle title and registration process across all 50 states. The eSTART — or Electronic Secure Title and Registration Transformation — Coalition, which launches Wednesday, wants to bring awareness to legislative efforts, facilitate engagement and dispel misconceptions associated with electronic title and registration processes. "You can do just about anything online these days, including things that people consider high stakes, such as banking," Tony Hall, Carvana's senior manager of government affairs, told Automotive News. "But when it comes to your title and registration experience, almost universally you are signing some piece of paper with a wet ink signature." This outdated, paper-reliant approach has led to a "less than ideal experience" for consumers who prefer the convenience of an online process, Hall said. "We just feel like the friction and inefficiency that comes with those paper processes — they're costing consumers money. They're costing industry money. They're costing [Departments of Motor Vehicles] money," he said. "And it's not just money. It's also time." Click here for the full story.
New Vehicle Inventory Levels Are Recovering but Car Prices Haven't Fallen Low Enough
While still elevated, new car prices are slowly, somewhat, returning to reality. Aiding that correction is rising inventory across the market, which is pushing prices in the right direction. The CarGurus Intelligence Report for February 2024 showed that while prices are heading down as inventory issues subside, there’s still plenty of room for improvement. According to Autoblog, the report found that new list prices are down 1.3 percent since February 2023 and 0.3 percent since January of this year. That’s thanks in part to significant growth in new car inventory levels, which saw a massive 65 percent jump from 2023 and 5.2 percent since January. That said, the picture isn’t without its dark spots. Even with inventory on its way up, it’s still 25.9 percent lower than it was before COVID-19, and prices are still more than 30 percent higher. Some individual models fared better than others when it came to price corrections. The Ford F-150 Lightning’s average price dropped almost 23 percent, while the Mercedes-Benz SL-Class fell by 22.3. The Ford Mustang Mach-E and E-Transit were third and fourth, while the Kia Niro EV came fifth. Click here for the full story.
Driven: 2024 Mazda CX-90 Zigs While Everyone Else Zags
The Mazda CX-90 debuted as a larger, more luxurious version of the automotive journalist's perennial favorite three-row crossover, the CX-9. At the same time, and while everyone else was downsizing, Mazda also debuted its new engine: a turbocharged inline-six-cylinder engine, then augmented by a 48-volt hybrid system. In the CX-90, the new powertrain makes 280 horsepower in lower trims or 340 hp in the S trims, and like all Mazda SUVs now, power goes to all four wheels. A plug-in CX-90 hybrid makes 323 hp, but Carbuzz tested that car separately. For this review, Mazda sent Carbuzz the top-of-the-line 3.3 Turbo S version with the Premium Plus package. This makes sense as Mazda appears to be working itself slowly but surely out of the more affordable part of the market and into the premium segment with its double-digit models. The CX-90 is a handsome devil, looking like the CX-9 has been to the gym but without overdoing the protein shakes. However, it's built on Mazda's new Skyactiv Multi-Solution Architecture and has a 7.5-inch longer wheelbase - meaning it is a whole new vehicle over the CX-9 and Mazda's biggest model yet. Click here for the full story.
Closing Back Doors to Chinese Investment in Mexico May Cost U.S.
With campaign rhetoric heating up on both sides of the aisle, Republicans and Democrats alike perceive Chinese imports as a threat. Although many lobbyists and politicians view Chinese foreign investment in Mexico as an unfair strategy to dump products on U.S. consumers, an important tenet of the US-Mexico-Canada Agreement and international trade law is national treatment of foreign investment. In other words, a company that establishes itself in Mexico has all the rights of a Mexican company. If Congress or the executive branch were to decide to indiscriminately block imports from Mexico because they include products made with foreign capital, it would be grounds for a formal complaint under the USMCA and likely compensatory tariffs, reports Wards. “Such a move could have important costs for both the U.S. and Mexican economies,” says Ken Smith Ramos, a private consultant who was the USMCA’s chief trade negotiator for Mexico. About protectionism in general, he adds: “We’ve seen that show in the U.S. in the ’30s and in Mexico in the ’70s, and it doesn’t end well.” Click here for the full story.
Moss Adams Tax Tip of the Month: EV Charger Tax Credit: Will You Qualify for the Expanded Benefits?
Authored by: Alison Hand, Tax Senior Manager
The Inflation Reduction Act extended the tax credits for installing electric vehicle (EV) charging infrastructure through December 31, 2032, but made significant changes to the qualifications and benefits.
Beginning January 1, 2023, businesses installing EV chargers are eligible for tax credits up to a maximum of $100,000 per charger. Prior to 2023, credits for EV chargers were limited to $30,000 per dealership location, so this change may provide qualifying dealers a significant increase in tax incentives for investing in EV charging infrastructure. For qualifying projects, depreciable property will be eligible for a tax credit of 6% of the cost (including installation), which increases to 30% of the cost for projects meeting the prevailing wage and apprenticeship requirements.
Not all locations will qualify for the tax credit under the revised law. For an EV charger to qualify, it must be installed in an eligible census tract that meets one of the following requirements:
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It is not an urban area;
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The poverty rate is at least 20%; or
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The median family income is less than 80% of the state median family income level.
It is important to consult with a tax professional to determine eligibility under the updated rules. Contact an expert from Moss Adams today.
Around the Web
Tested: 2024 Porsche Cayenne Makes a Solid Base [Car and Driver]
If You Drive a Car, You Are Already Using F1 Technology [The Washington Post]
Subaru WRX Long-Term Update: The Base Seats Are Fantastic [Autoblog]
