I think we can all agree, no matter who we are, that high gas prices suuuuuuuuck. There is seemingly no benefit to paying, like, $70 to fill a Corolla. However, there may be a silver lining.
A recent report by Automotive News revealed that General Motors is starting to grow concerned with the industry’s obsession with expensive pickups and SUVs. Especially now that gas prices are so high. Filling up these oversized vehicles is nearly impossible for many American families.
“I’m not going to sit here and say it’s permanent yet,” GM North America President Duncan Aldred said at a Center for Automotive Research conference near Detroit. “But we are seeing somewhat of a shrinking of pickup trucks, full-size utilities, and some of the heavier [vehicles] and an increase in the more affordable segments of the industry.”
In the past, gas prices needed to be higher for six months or more to start such a dramatic shift towards fuel-efficient vehicles. But GM CEO Paul Jacobson felt it was a bit different this time around. He started to notice the shift over the last 12 weeks as gas prices reach nearly $5 a gallon. Gas prices may drop if the agreement between the U.S. and Iran is legit, although the drop would be gradual (if President Donald Trump even stuck to this).
If gas prices lowered, would Americans go back to their big, ugly, overpriced SUVs? It’s possible. But with the future so uncertain and policies changing by the moment, families may be hesitant to make such a large investment. The average price of a new vehicle is over $50,000 in the United States, and large pickups and SUVs are definitely part of the rising average.
Could small cars be coming back?
Nissan’s conflicting small car plans for the United States
Unfortunately, it’s never that simple. Even though Americans have been begging for small, cheap cars for years, automakers are hesitant. They’ve seen fewer buyers over the years, but this is due more to rising prices than to a lack of interest. Still, if Americans can’t afford the new norm for a compact car, it may not be worth making them. Why? Profit margin is much smaller for these more affordable vehicles.
However, some automakers have decided to take the plunge as the EV market declines. For under $30,000, you can get a Honda Civic, Toyota Corolla, Mazda3, Kia K4… Another brand is Nissan, which offers the Kicks for under $23,000 (base model). This subcompact crossover SUV is in the spotlight right now since Nissan recently revealed the Kicks e-Power.
Bad news for Americans: this version of the Kicks is only available in Japan. With a 1.4-liter three-cylinder engine that serves as a generator that charges the vehicle’s batteries, the Kicks e-Power has more torque than the U.S. model. But even more tantalizing: it’s just $18,700. America hasn’t seen a vehicle below $20,000 in years. Which is unfortunate, because it would likely sell insanely well in the current economy. If the e-Power comes to the U.S., the price will go up.
Still, it’s promising to see automakers considering these more affordable models. This could change in the future, as some brands, including Nissan, have warned that their compact cars could be pulled from the American market if Trump’s tariffs remain. With General Motors being a domestic brand, maybe they could justify selling small cars when nobody else can. This puts Americans at the mercy of GM, which currently has compact options like the Chevrolet Trax.
