What can drivers expect in 2023? Dealer markups, record EV sales and massive V8s.

The global semiconductor crisis of 2022 has been a headache for drivers. Record high prices, months of delays, and expensive dealer markups. Lack of parts and software forced automakers to park new cars and trucks in vacant lots, unable to sell them. Consumers also saw fuel prices reach unprecedented levels.

Interest in electric vehicles will peak in 2022, with innovative models such as the Ford F-150 Lightning, Kia EV6 and Hummer EV fueling consumer interest. The automaker also responded to enthusiastic demands by rolling out sporting his cars and hatches with his manual transmission, his powerful V8, and high-revving naturally aspirated engines.

Will 2023 be a repeat of 2022? Here’s what the experts say.

car price

Consumers looking to buy a new car in 2022 are out of luck. Horrifying stories were widely reported of fellow buyers paying him $10,000, $20,000, or $50,000 more than the suggested retail price. Additionally, according to Edmunds, the Average Transaction Price (ATP) for a new car hit a record high in November when he reached $47,681. Monthly lease payments also jumped from $471 in November 2019 to $583 in November.

But according to Jessica Caldwell, Executive Director of Insights at Edmunds, the jaw-dropping prices may finally be over.

“Prices have been very high for over a year now, but are starting to settle,” she told ABC News.

Average transaction prices for new vehicles fell below MSRP in November for the first time since July 2021, with prices of heavy-duty trucks, SUVs and luxury vehicles falling in recent weeks as consumers look for budget-friendly alternatives. Rising interest rates on auto loans have also dampened demand for expensive vehicles.

“Interest rates are a big deterrent…you put a lot of your income on car payments,” she said. “This is leading to a softening of the market.”

New car loans average 6.6% and used cars 10.2%, according to Edmunds data.

Ed Kim, president and chief analyst at AutoPacific, said a recession, even a mild one, would hit prices and demand next year.

“We may get into a situation where supply comes back, but this time we don’t have the consumer numbers to support the volume,” he told ABC News.

stock returns

Sparse inventories and a manufacturing slowdown have turned the auto industry upside down. Some brands, like Toyota, have warned investors and customers that production of major vehicles in 2023 will be hampered by ongoing shortages.

“Chips are going to be the talk of the first half of the year,” Tyson Jominy, JD Power’s vice president of data and analytics, told ABC News.

However, Jominy predicts inventory will generally increase in 2023, vehicle selection will increase, and prices will rise. But too much supply can come back with great incentives and diminish profits.

“Auto makers are trying to be disciplined and keep their inventories tight,” he said.

Kim said China’s decision to ease its “zero COVID” policy will help ease chip and supply problems that have plagued automakers since 2020.

“We will not be constrained in 2023 like we were in 2022,” he noted. “But chips can still have long lead times – up to six to nine months before one is delivered or installed in the vehicle.”

He added, “As chip supplies recover, the priority will be to complete the vehicles parked in the large, empty field and deliver them to customers.”

ultra-luxury demand

Chip shortages and the ongoing pandemic have not stopped luxury automakers such as Rolls-Royce, Bentley and Lamborghini from selling thousands of cars. From 2021, all three companies are expected to top sales combined, which is a record year for the storied brand.

Lamborghini CEO Stefan Winkelmann told ABC News:

Recent models such as the Rolls-Royce Ghost Black Badge, Bentley Flying Spur Hybrid, Bentayga Extended Wheelbase, Lamborghini Urus S and Urus Performante are finding new well-financed customers.

The luxury space as a whole did very well in 2022. Cox Automotive said in a customer newsletter:

Kim said consumers who can afford a six-figure car still have cash to spare and are likely to continue buying more.

“People at that income level are well protected from conventional economic cycles. A recession won’t affect ultra-luxury brands,” he noted.

Enthusiastic cars and big V8s

Automakers quietly launched a number of sports cars and performance cars that weren’t made for EVs. There was the massive debut of the Corvette Z06, a ferocious sports car powered by his naturally aspirated 5.5-liter flat-plane crank V8 engine that revs to 8,500 rpm.

Manual enthusiasts had plenty of new models to choose from. Nissan Z. Toyota GR Supra, GR 86, GR Corolla. BMW M2; Porsche 911 Carrera T; Honda Civic Type R; Cadillac CT5-V and CT4-V Series Blackwings.

Electrification has not stopped the production of V8 engines for SUVs. British car maker Aston his Martin has unveiled his DBX 707 which is very fast. The 4.0-liter twin-turbo V8 (697 hp) offers an engaging acoustic, and his control capabilities at race start launch terrify drivers and passengers.

General Motors has launched the luxurious Cadillac Escalade in its Escalade V-Series, hailed as “the industry’s most powerful full-size SUV.” The Escalade V’s 6.2-liter supercharged V8 engine produces 682 horsepower, and he accelerates from 0 to 100 miles in 4.4 seconds. There was also the all-new GMC Yukon Denali Ultimate, a state-of-the-art seven- or eight-passenger SUV with a 6.2-liter V8 and 10-speed automatic.

Lexus has opted for the V8 for its sleek IS 500 sedan, and Land Rover’s flagship SUV, the fifth-generation Range Rover, has three powertrain options, including a V8.

Jominy said that in an increasingly electrified world, a malicious V8 could have a longer lifespan than expected.

“This is an area where consumers are reluctant to trade,” he said. “Everything with 3 or 4 cylinders will be replaced by EV.”

EV market share

With so many new electric vehicles launching in 2022, it can be difficult for consumers to track. But none were Teslas. Different categories of electric vehicles, including pickup trucks (GMC Hummer EV and Ford F-150 Lightning), stylish crossovers (Audi Q4 e-tron, Kia EV6), plush toys (BMW iX, Cadillac Lyriq, Rivian R1S) and sporty I saw. Sedan (BMW i4, Taycan GTS).

The biggest story of 2023 will be the number of three-row electric SUVs on the market. Now, “the time is peak for income and for raising a family,” he explained.

“Right now we only have the Tesla Model X…there is a real lack of electric three-row products on the market,” he said. “In the next 12 months, Hyundai will have the IONIQ 7, Kia will have the EV9, VinFast VF9 and the electric Explorer. All of these vehicles will serve unmet needs. ”

In 2022, EV supply failed to meet market demand. Caldwell said that in 2023, more consumers will start moving to greener vehicles, and the share of EVs will rise from 5% today (2.5% in 2021). rice field.

“There will be a lot of EVs next year,” she said. “Chevrolet is making a big push with its Silverado, Equinox and Blazer. increase.”

Jominy said he is waiting to see if lower fuel prices will dampen demand for EVs and how automakers respond to the inflation-reducing legislation signed into law by President Joe Biden in August.

“If you’re a car manufacturer and you don’t have a factory in the US, [that can build electric batteries] It can be difficult,” he said. The biggest challenge for EVs is that gasoline prices have fallen significantly. ”

Tesla CEO Elon Musk’s decision to open up the company’s popular Supercharger network to competitors may be the real reason more consumers are switching from petrol cars to electric ones, Kim argues. did.

“Range anxiety and charging time are the biggest reasons people don’t want to go electrified,” he said. “Tesla’s biggest competitive advantage is its charging network. [North American Charging Standard]In theory, a Tesla-like charging experience would be possible. ”