Markups are an ongoing hell for the auto industry. They're partly to blame for inflation and are actively keeping enthusiasts from buying some of what are likely the last-hurrah combustion cars to hit the market. Unsurprisingly, new electric cars are also falling victim to markup hell including the GMC Hummer EV.
It would appear that the inferno may finally be coming to an end. See, the Hummer EV community has been absolutely fed up with markups. Facebook groups, forums, and Reddit have all turned from buyers looking to spend top dollar to chastising resellers for asking a penny more than MSRP—and even that’s too much, it seems. The bubble has officially popped.
The market for these trucks has already crashed. Not long ago, examples of the Hummer EV were selling for up to $325,000. A quick search around the web now shows vehicles selling at MSRP or slightly above. Autotrader has about 10 examples near me, and only two of them advertise a markup. Compared to eighteen months ago, that’s nearly one-third of the going rate.
At the time, some buyers were picking up the trucks simply to have the first example on the block. Others were buying as an investment—after all, it seemed like the steam just couldn’t run out for Hummer EV demand, or at least that’s what resellers believed.
Many frugal buyers will recognize the 20-4-10 rule of car financing: make a 20% down payment, never finance a car for more than four years, and ensure that your note payment is 10% or less of your gross monthly income. The 2024 Hummer EV Pickup's base trim MSRP starts at $101,140 after destination charges, which means even with 20% down ($20,288), the monthly payment at today's average prime interest rate of 6.40% would be $2,393.87.
That's nearly half of the average U.S. resident's gross annual income. It's pretty clear that these are unobtainium for the average car buyer, even at MSRP. But triple that? Even well-off car buyers looking for their next luxury ride surely had a hard time biting at over $300,000.
But there was still a market: the buyers who cared more about status than the impending depreciation. Because—and let’s be real—everyone knew that the bubble was going to pop at some point. This meant someone who might not have purchased a Hummer Ev for themselves but could still secure a loan could have easily doubled or even tripled their investment with little effort.
Electrification brought forth a new era of car enthusiasts. Whereas the old Hummer might have attracted the mil-spec chaser, off-road enthusiast, or someone just looking to drive the biggest car on the road, the new Hummer EV is sought after by people with deep pockets willing to pay dearly for a high-performance EV with the latest tech. GM also called the Hummer EV a "super truck," which was thanks to the whopping 1,000 horsepower under the driver's right foot. This enabled the nine-ton truck could accelerate from 0-to-60 in three seconds flat, which meant piloting one of the largest, fastest, heaviest, and most expensive trucks while in the driver’s seat. Status.
The Hummer has always been more about being a status symbol than an affordable truck. When the Hummer H2 debuted in 2003, it carried with it a nearly $50,000 sticker price—that's a hair under $85,000 in today's money. While there was no battery-powered H2 produced, we can at least get an idea of what one might cost today by knowing that the average EV also sells for around 10% more than its gas-powered counterpart, according to data collected by KBB. With inflation and this figure accounted for, it would put the cost comparison of an H2 BEV at around $93,500, or within $10,000 of the Hummer EV’s base-trim MSRP.
The H1's MSRP was even higher, ending up well into the six figures by the time production ended in 2006. It also was never intended to be sold to the consumers. If it wasn't for Arnold Schwarzenegger (who owned several Hummers, including the first gas-powered H1 and Kreisel-converted electric H1) AM General may have never even built a civilian-market version. As such, the H1 carried a hefty price tag which continued to grow after production ended with fewer than 12,000 examples being built over 14 years. It's not really a surprise that the Hummer EV followed in its footsteps.
As InsideEVs reported earlier this year, production of the current-gen Hummer is finally picking up. GM built approximately 11,058 examples of the Hummer EV during the first seven months of 2023, which is more than double 2022’s total output of 4,890 units. To top off the increased production, GMC president Ducan Aldred lifted the mandatory six-month hold on dealership demo units earlier this year, which flooded the market with hundreds of previously allocated units at the same time.
At the end of the day, a vehicle is worth what someone is willing to pay for it. The members of the Hummer EV community—whether it be those who want the electric truck, those who own one, and those who want to flip one—haven’t been able to settle on a middle ground for some time. Now the rule of supply and demand has kicked in to resolve it, and the result is a market price right around MSRP. And that’s a whole lot better than $325,000.
