Device vs. Device

By
eric
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50
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You may remember the Spy vs. Spy comic strip from Mad Magazine, back in the day. How about device vs. device?

One device being the one named Charger – because of course it needs that. The other device named ID Buzz – because you need to be high to appreciate it. The Charger device is made by Dodge and the ID Buzz device is made by VW and neither is selling well.

So far this year, Dodge has found 1,947 people willing to buy the Charge device, which works out to about 650 devices per month so far. Which works out to about 13 devices per state sold so far. It’s also fewer than the number of left-over 2024 Chargers – the ones that aren’t devices – that have been sold so far this year.

VW’s device isn’t faring much better. Only 1,901 of them have been offloaded so far. You can do the math.

Maybe VW (and Dodge) ought to have.

The ID Buzz has a base price of $59,995 – just $5 shy of $60k. Because “$59,995” sounds less expensive than “$60k.” The Charger – the device, not the car – has a base price of $57,995. As opposed to the $33,200 base price of the last Charger that was not a device.

Consider what this costs.

To drive a new Charger – the device, not the car – will cost you around $800 per month for the next six years, assuming zero interest on the loan. VW’s device would cost you a little bit more.

$800 per month comes to $9,600 – just shy $400 of $10k annually – not including the cost of insuring the device, the cost of which is based upon the replacement cost of the device. You can imagine what that might be.

How many Americans can afford to spend $10k annually just on car payments? I refer you back to the sales figures quoted above. Are these figures apt to increase – or decrease, in view of the worsening economy and the looming tax increases – they are styled “tariffs” – that will increase the cost of not just vehicles imported here but every car insured here, because we’re all going to pay for the increased replacement costs of imported vehicles that we might run into.

Your bill will be arriving in the mail soon. You can send a thank-you note to the president.

Probably, Dodge and VW are selling the handful of devices they have managed to sell so far at a huge loss – because it is probably necessary to price them for less than it cost to manufacture them, in order to sell any of them. These devices would probably need to be sold for $70k to make them profitable to manufacture. But then it would extremely hard to ever sell more than just a few of them.

Has this not occurred to them?

VW used to be in the business of selling lots of wagens – that is, cars auf Deutsch – to lots of people (i.e., the volk). It is now in the business – if you want to use that word – of trying to sell luxury-priced vehicles to a few folks, who have the means to buy them. But how many people who have the means are interested in buying a Volkswagen? Not – by any stretch – that there’s anything wrong with Volkswagen, as a brand. The problem is that VW isn’t a luxury brand. More finely, the problem is that most people with luxury car money aren’t interested in spending it on a Volkswagen.

This has been tried before. VW introduced an ultra-luxury model – the Phaeton – back in the early 2000s. It sold about well as the devices VW is trying to sell today.

This is arguably the problem for devices generally – in that almost all of the ones available in this country come standard with luxury car price tags.

Consider the Charger device. Its price is about $25k higher than the base price of the Charger that wasn’t a device. Granted, the Charger device is more powerful and speedier on account of its high-performance electric motors and high-output battery pack. But that only sells when people can afford to buy. People who could afford a $33k Charger – the car, not the device – can’t afford to spend $25k more to get into a device. And if they could, the likelihood is they’d be more inclined to buy a device with a big three-pointed plastic star (or BMW spinner)  glued to its plastic front clip because then they’d be getting the luxury-car brand for the price.

Dodge isn’t a luxury-car brand, either. Not (once again) that there’s anything wrong with Dodge as a brand. But – like VW – Dodge is not a luxury brand and this business of pricing Dodge devices on par with the devices on offer from luxury-car brands is as preposterous (and foolish) a thing as McDonald’s trying to sell $20 soy patty “burgers” to people who like $5 hamburgers made of meat.

Trying to do that would likely end McDonald’s – just as what VW and Dodge are trying is apt to end them also.

. . .

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Related posts:
  1. Every Car a Prius – or a Device
  2. Drive a Free (Almost) Device!
  3. Why no Charger?
  4. Honda Isn’t Getting a Charge Out of GM’s Device
  5. Desperation Leases

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50 COMMENTS

  1. “Your bill will be arriving in the mail soon. You can send a thank-you note to the president.”

    I just might.
    As much as I hate price increases, we’ve got to bring our industrial base back, and I can’t think of a better way than by discouraging imported goods.
    Have we decided that some financial pain in the near term in order to improve our financial position in the longer term is no longer acceptable? Are we ok with the rest of the world continuing to ass- rape us in terms of trade? I haven’t, and am not, and I’m barely making my bills as it is. I literally don’t know but that my family and I might lose our house if things get worse, but I still support what’s best for the country.
    Of course, a rational tariff policy needs to be complemented by deregulation, which the administration has promised: we’ll see how they follow through on that.
    It’s unfortunate that we have decades of terrible trade policy that needs to be reversed, but that’s where we are. Sticking our heads in the sand and crying la-la-la-la-la isn’t going to fix it. The status quo is unacceptable, and what’s more, it’s unsustainable.
    I’m a little disappointed in your position on this, Eric. I strongly disagree with you.

    • Hi Mark,

      I hear yopu; but here’s the thing: Unless regulatory compliance costs are reigned in, it won’t be less expensive to manufacture cars or anything else in America. It will just cost us more. Prices will rise to reflect the higher manufacturing costs. This will then cost jobs – because fewer Americans will be able to afford the increased costs of what’s manufactured here.

      America was great when people were free to manufacture things – and to manufacture what buyers wanted (and could afford).

      Why not allow vehicles such as the Toyota HiLux Champ pickup – $13k in other countries – to be sold here? Or made here, for that matter? That’s hwo you make America great, again.

      Not by making Americans pay more for American-made stuff. Just my 50 on this.

      • I agree completely with every one of your points there.
        By themselves tariffs won’t solve the problem, I get that, and I hope I didn’t imply that. But I think they’re a good approach as a part of a solution.
        “Free trade” has, along with regulation (and probably unions), almost completely destroyed our manufacturing. You can argue that doing tariffs first is putting the cart before the horse, and maybe that’s right. But as far as I’m concerned they’re an indispensable part of the solution. The fact is that even apart from the regulatory issue, an American worker being paid what we consider a decent wage can’t compete with a Chinese one making pennies a day or whatever.
        Plus, tariffs can allow for reduction in income taxes; don’t forget that for the first century or so of our country, tariffs were one of the main if not the main income generator for the gov (of course, the bloated and tyrannical gov apparatus of today takes a lot more money to keep itself rolling, which is another issue).
        And you may say that it’s just a replacement tax because the consumer will pay it anyhow, but that’s not completely correct. Part of the tariff will get passed along, sure, but not all of it. If foreign entities didn’t think they’d wind up paying them they wouldn’t squeal so loudly at the mere mention of tariffs.

        • Good stuff, Mark –

          And: My hope is that Trump is using the tariff thing as leverage – which I support. But I also hope he understands that compliance costs have got to be addressed. Simply eliminating federal “safety” compliance costs would make it feasible for GM or Ford to build a vehicle like the HiLux Champ and sell it – at a profit – for under $15k. I suspect such a pick-up would sell hugely, to use Trump’s favorite word.

  2. The Charger with an engine felt like a lot for the money. Big car, great sound, V8.

    You still get the size for a premium price. Not so good a deal.

    If one were to drive and EV, at least get the coolest looking one, but that market is pretty much sold out.

    Wouldn’t be surprised if new EV buyers are going Tesla due to love of MAGA

  3. Shadow, the fun days for cars are gone. For what, 5 or 6 years we have been subjected to little wagons, SUV’s, that all look alike. With their dodgy compliance engines and feminist appeal they are about as exciting as washing one’s underwear. Everyone will lease because God forbid venturing into fresh hell of the no warranty left. One will choose his little wagon based on the price, quality of the dealership and proximity to home. Brand distinction is over.

  4. I could only afford to spend $10K annually in indentured servitude, given that’s about what I make. That’s a plus for the bus #vanlife

    Nice Spy Vs Spy

  5. Re: the VW bus. My dad had a 1962, bought new. Engine went in ‘64 between jobs for him. Could only afford a bug not bus engine. 36 HP at least got him back on the road.

    So, today – something fails no warranty you’re done for, financially. Goo luck America!

    • That brings back a memory for me. Years back I bought a ‘64 bus. Heavy duty version with doors on both sides and double floors. Came with a sketchy 1500 which died a couple of weeks later. Swapped in a 36 hp motor I had laying around. 55 mph top speed, with a tailwind! Man, it was slow.

      • Morning, Keith!

        Yup. That’s what happens when you use a Beetle engine designed to just-barely propel a 1,600 Beetle to power a much heavier bus! Still, the things had their charms, among them being it was easy ad cheap to rebuild/replace that little air-cooled flat four. The new device’s battery, not so much.

  6. My neighbor replaced his garage queen new Bronco with a Buzz last week.

    I used to think he was a car guy, but now I have to add the quotes around “car guy”.

    Like Tim Walz.

  8. Volkswagen is very capable of manufacturing a diesel engine. You will receive Rudolf Diesel’s seal of approval. Plant peanuts and you will be able to fuel the diesel engine. Very environmentally friendly.

    If you want to sell a VW bus, engine-ize the thing.

    • “Dieselgate” happened at the wrong time, as love him or hate him, doubt Orange man would have crucified them Vdub like Barry the Limp Wristed Queen did

      Seriously, I’ll fight anyone who disagrees that Diesel needs a comeback, and with a vengeance to boot!

      • Orange man would have crushed VW even worse for dieselgate! The only “Crime” VW was guilty of was making an efficient fun economy car better than the clowns here in the states could… our Govt has a history of smacking VW down if they become a threat to UAW jobs. Diesel was a threat to US automakers.

        The chicken tax was the same BS – Lyndon B Johnson issued the executive order to tax small trucks because the UAW felt like the VW transporter trucks and panel vans were becoming too popular. He got an endorsement from the UAW in the upcoming election in return.

  9. ‘looming tax increases – styled “tariffs” – will increase the cost of not just vehicles’ — eric

    After the S&P 500 index plunged below 5,000 this morning to a 20 percent loss from its mid-February high, one of Donnie Fubar’s minions said that he might pause his harsh new taxes for 90 days. Then stonks face-ripped back to the upside.

    Let us recall, once again, that Article 1, Section 8 places authority over tariffs squarely and exclusively in the hands of Clowngress.

    Whipsawing the global economy every day every hour based on the whims of an unstable, orange-haired clown like Donnie Fubar is very definition of insanity.

    MAGA is burnt toast. Donnie F*cktard just wrecked not only the economy, but also the pension funds of most Americans.

    Living in a dying, genocidal empire run by raging, geriatric retards ain’t for sissies.

    • Hi Jim,

      One of the interesting things, to me, about this business is that it reveals a callousness that’s hard to get one’s head around. The hit people are taking on their 401ks is – to use his word – huge. He, of course, is unaffected by such things. What’s a hundred thousand or so, either way? Chump change!

      That’s not the problem, though. The problem is his indifference to such things. His recent comment about how he “couldn’t care less” speaks for itself. What an asshole – even to think such a thing. But to say it out loud?

      Wow.

      • That’s one way of looking at it. And it has some validity.

        I choose to look at it like this: I’m not shedding any tears for any of the (former) billionaires who have been disproportionately affected. My hope, is that this ends up revitalizing Main Street…will it? Unfortunately that remains to be seen, and it will be a while before we know. One of the major downsides of the Internet age, is that people are totally disconnected from the amount of time & effort it takes to build things.

      • So, the President should kneel to the Stock Market because people could lose money? Is that the new libertarian outlook? Retirement funds in the Stock Market are a gamble. Trump gave everyone fair warning that the tariffs were going to go into effect. A good financial advisor would have been on their phone with a client saying, “Hey, maybe it’s time that we take a larger percentage of your portfolio and roll it into cash.” The writing was on the wall for anyone who is able to read.

        Days like today would be a great time to stock up on Exxon or tech stocks that are sitting at 52 week lows. If you are going to play the market, play the market. If one can’t handle three days of losses then one needs to pull their money out and stash it into a CD.

        • You’re on fire, RG. Love it. Sometimes big boy/girl pants are hard to put on.

          Putting aside the constitutionality and wisdom of Trump’s tariffs, I have a respect for him sticking to his guns, despite the wall-to-wall (and imo manufactured) outrage. If his tariff tactic (perhaps bluff) is a way to rebalance the US economy into ultimately being more free and open, I’d be screaming at him for faltering in the face of some bad, partisan press.

          • Hi ML,

            Usually around the 15th of March to about the 30th of April my give a damn button breaks. It could be the 80 hour work weeks, the lack of sleep, or just the need to express my opinion with no filters, but I find most people don’t want to hang out with me during this time. 🙂

            Trump is making unpopular, but tough decisions. I agree with you he is sticking to his guns. Not all choices are popular ones, but they need to be addressed and dealt with. I understand his actions on tariffs and why he can’t back down. If he does he loses ground and respect. The discrepancy of tariffs was not going to work if he did it on a country by country basis. By creating havoc and a potential world wide recession he has them panicking. When your competitor starts feeling alarmed it usually is the best opportunity to get what you want because they aren’t thinking rationally.

            We will see if his move was one of brilliance or one of one of stupidity. Personally, I think we will end up on top. The money that flows out of this country (and our wallets) props up the world.

            A word of warning to Trump…he needs to immediately focus on getting medicine manufactured in America ASAP. That is the card that China holds that could spell devastation to our citizens. And if I were China that is the card I would play.

            • Hi RG!

              I agree with what you’ve written; that said, I think Trump was a fool to say “I couldn’t care less” about the cost-increasing effect of his tariffs. That was politically stupid and just gratuitous. He could have said: “Look, these reforms are needed and while there will be some short-term pain, in the long run this will be good for everyone.” Something like that. Instead, he said something that makes him look like a you-know-what.

              Good to see you back, by the way!

              • Hi Eric,

                I believe he said that regarding the increased tariffs on foreign vehicles. He followed it up by stating that the higher cost of foreign cars would have Americans purchasing American manufactured cars instead (I am paraphrasing).

                I don’t view Trump as someone with tact, his thoughts can be incoherent and words insensitive, but he understands business and he can read a room. I am much more impressed with people who have the ability to think outside the box, identify the problem, and solve it. Pretty words are not necessary.

                • Hi RG,

                  Yes, but . . . some of these “foreign” vehicles are American-brand models such as the half-ton trucks made in Mexico and sold under the Ford and Chevy and Ram brand names. And does it really matter whether manufacturing returns to America if the cost of manufacturing in America doesn’t go down?

                  • How can one be an American brand made in Mexico? There are also American brands made in China, India and Vietnam. Real American brands hire actual Americans and they don’t off shore their labor.

                    Let’s be real the majority of “American” brands will not return, because it takes years to build factories, find new supply chains, and hire workers.

                    Trump is erecting the tariffs for two reasons: 1) opening doors for American manufacturers to sell their goods overseas to markets that have stomped them out and 2) to reduce tariffs and trade deficits with other nations.

                    Bringing manufacturing back home is honorable, but highly unlikely.

                    We are the only country in the world that whines and cries about enacting tariffs on overseas goods. The majority of countries have tariffs on American (and other countries) goods (e.g. Europe charges 4x the amount on a American made car then they do their own).

                    Tariffs are used to bring support back home. To create a more localized approach to resources allowing businesses (and people) to thrive on their own soil. Only in America do we not support each other. It is freaking twisted.

                    Why do we need to buy French champagne, when we have damn good whiskey one state over? Why can’t be pick our own strawberries at Bill and Barbara’s strawberry patch instead of shipping them in from Mexico? Why can’t we purchase lumber out of Oregon rather than Canada? What is so wrong with paying a few dollars more to support a local business and local workers rather than subsiding Chinese workers? We then pout that this country has no money. Of course we don’t, we shipped our work overseas – our IT, our factories, our clothes, our medicine.

                    People were belligerent in the 1970s and 80s when Japan made an appearance in our country, but the Japanese at least made quality products. Today the US is willing to settle for crap to save $25. And now they are upset because they can’t continue to buy crap.

    • Market Schmarket. If one is reliant on the ‘market’ to live, then I feel sorry for them.
      I have been debating with a few of my friends about this stuff. Two are heavily reliant on ‘wall street’ to live. Of course they are mad. I’m not. 3 of the 5 are not.

      I was taught a long time ago that the only way to create value/wealth is to make something out of raw materials/labor. Everything else is just shuffling paper around.
      At 36T under water, and the world in mega financial debt, these places are burning down whether you like it or not. Trump is attempting a hail mary to get Manufacturing back here asap. Will it work? IDK.

      • Hi Chris,

        Yup. One of the reasons I’m divorced is because my ex wanted me to “invest” in 401k plans. I refused. I told her my reasons for not trusting the Shyster (Stock) Market, which is basically a casino played by people who have the inside scoop (and we don’t). I told her I believe in owning real things and living below one’s means. That wasn’t acceptable. So now I’m divorced. But that’s ok. Dawn doesn’t like 401ks or shysters. Which is part of the reason why I like her!

        • Yup, every time I tried it I lost big. And I couldn’t afford to lose it, I was just a sucker to the shysters. After strike 3 I said enough, I will make it myself.
          And of course living below one’s means is the key.

          • The market is a casino, there’s no two ways around it. If there ever was any underlying value those days are long gone. And even if there was the game has always been rigged against outsiders.

            No matter, though, some of us were unaware before waking up (thus have existing significant wealth tied up) or even if you understood the game had no choice if 401K/IRA was used as compensation. I am forced into the game and it’s a good thing that I (and others like me) don’t walk away since your power grid would get even less reliable. There’s many of us who genuinely like what we do despite all the b.s. we have to put up with.

            There’s not much I can do about it so I try to keep my retirement in places that aren’t subject to too much theft from TPTB. I genuinely wish I could just take it all out but the punishment for that is painful taxation. I have with some of just paid the penalty to use it for something now. It will be taxed in the future at a lower rate, but that’s also after it’s grown.

            The things I use it for now I hope offset that tax-free growth but to take it all out, lose 40% of it and then to only let it sit is financial suicide. Cash is terrible, commodities are OK, real estate is nice but comes with ongoing costs. Inflation isn’t a bug, it’s a feature to force you to stay connected, a punishment for wanting to participate and produce.

      • Ninety-nine years of market history from the Center for Research in Security Prices (CRSP) shows that you can roughly keep up with inflation by investing in T-bills and CDs. Or, you can earn about 2 percent more than inflation in intermediate Treasurys. Finally, stonk investors beat inflation by about 5 percent.

        This research was first published in 1964. In the sixty years since, the figures and the conclusions haven’t changed. Literally every pension fund in the US but one — Social Security — invests in a mix of equities and fixed income.

        Destroying pension funds, I expect, will be one of Donnie Fubar’s legacies. This will affect every employed person with a pension plan.

        • This calculation is impossible to measure, as products and productivity continue to change and evolve so there can never be an apples to apples comparison of products and productivity before the inflation of the money supply versus after. Also, one can never keep all other factors constant with the only variable being pricing with and without the inflated currency, particularly in light of the fact that equity investors might also be biased in investing their new dollars into equities (as opposed to Treasuries, CDs, commodities, etc.). Making an assertion with such numeric exactitude over the economy (something that is largely behavioral with perhaps millions or billions of variables) is total BS.

          Consider the source of this pro stock market sophistry (from Wiki):

          “CRSP was founded in 1960 by James H. Lorie (professor of finance and director of research) and Lawrence Fisher (assistant professor of finance) of the University of Chicago, with a grant from Merrill Lynch. . .”

          Sounds like it might be bought-and-paid-for “research.” I recall EP had a meme that said something like “97% of scientists agree with whoever is funding them.”

          This of course in not a defense of Orangeman in any way. I’m just calling BS on the CRSP’s conclusion as scientific finding.

    • Would be nice to see Clowngress assert their constitutional authority and tell Trumpenstein to just go sit in the corner and STFU. Of course first they have to find where they left their spines. I am surprised that the CEO’s whose annual salaries are tied to their company’s stock price aren’t on the phone to their locally owned Clowngress critter screaming at them to put a stop to the insanity.

  11. If they sell a turbine hybrid, with a turbine that can burn a wide range of fuels, that will be an exotic new technology which will merit a premium price. But a battery car with dangerous exotic batteries and a limited range? And for the paroles and peasants who don’t care about cars, a 50k+ BEV is a nonstarter, even if they’re only traveling 50 miles a week to and from a fast food job and their local independent pharmacist.

  13. Here in the UK, it seems no amount of “buzz” is enough to make people appreciate the ID! They are flogging them away on 120 per month leases, just to get them off the lot I suspect…. (to put into perspective a Golf with a real engine is around 400 depending on the spec).

  14. In theory, shouldn’t these devices cost significantly LESS to insure after the first year?
    With such catastrophic depreciation, the insurance company only has to pay out on market value – not the MSRP – if the device is a total loss.
    Which brings another point to what happens in 2-3 years when the handful of Charger devices that were leased return to dealers for resale?
    They are going to be comically inexpensive, as by that time, their true nature as a glitchy, flammable, 3-ton paperweight should be known.

  15. Holy crap, for an $800 a month car payment I want an 8 cylinder engine, standard transmission and to hell with the safety stuff. I want a car that is fun as hell to drive, not one I am forced to poke around in like I am 90 for I am not there yet.

    • And it might just happen. Depends on how far the Fed roles back erroneous regs.
      Most on here agree that the 90’s, early 2000’s, were pretty good ‘car’ days. I doubt they’ll role back that far for fear of 3rd world competition. But I am hearing rumors about de BS’ing our engines, which would be a step in the right direction for reliability and costs.

      • That would indeed be welcome!

        EFI, cruise control, automatic headlights, & Bluetooth were good things.

        A lot of people like ABS even though I don’t — maybe that can be optional?

        Most of the other gizmos are useless, inconvenient, and/or dangerous.

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