Honda Clarity Plug-In Hybrid now sold in California only?

Discussion in 'Clarity' started by Mrmayhem4, Aug 3, 2019.

  1. ab13

    ab13 Active Member

    The issue with ordering a vehicle is that the dealer takes on the liability, because you don't have to purchase the vehicle if you order it. So they have the chance of having to keep it if someone doesn't buy it. Perhaps in low demand areas the dealers aren't interested in this scenario.
     
  2. Domenick

    Domenick Administrator Staff Member

    The discussion about the Clarity's instrument panel has been excised and given its own thread.
     
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  3. 2002

    2002 Well-Known Member

    "Is it your premise that Honda has excess inventory (supply exceeds demand) and they are stockpiling them somewhere?"

    No.

    "If there is not a supply constraint, why are dealers that want them unable to get get inventory?"

    You will have to ask Honda, they have only given vague statements about supply and demand, so we are only left with our individual guesses and opinions about what the real reason is.

    "Since the PHEV is costly to produce given it's two complete drive systems, it could very well be losing too much money without the "revenue" from ZEV credits, production was decreased, and the inventory available is most profitable to them in California (they likely met the other Section 177 regional requirements and have enough credits in the bank)."

    That is the most likely reason in my opinion.

    "Whatever the reason for the pullback on inventory availability outside of CA, low demand is not an explanation that fits (even though demand may indeed be low)"

    I guess we have a different definition of low demand. My definition of a car in demand is that they can sell a large number at normal discounts (normal of course being subjective). I think they tried selling the car nationwide hoping that with the tax credits it would sell at reasonable numbers with normal discounts in areas where they don't have a regulatory need to sell them. Once they realized that this wasn't the case they pulled back to the ZEV states starting with the 2019 model year. And then when cars weren't selling well enough in those states either, they pulled back to California where they have a combination of the need for credits along with slightly higher demand compared to the rest of the country, even though they still currently have to give $5,000 to dealers in California to keep sales going.
     
  4. 2002

    2002 Well-Known Member

    I would think a dealer can require a non-refundable deposit. Although even then a dealer may think it's not worth the risk that they might be stuck with a car that they don't feel they can sell.

    But if we follow the theory that some dealers would like to order Clarities for stock but can't, then at least for that dealer accepting an order would not be considered a risk.

    What we don't know is whether dealers know that it can be ordered but they just don't want to, or if there are a lot of dealer sales people who only know that the car is no longer being shipped for inventory in their region but they don't realize that it can still be ordered. We hear about so many misinformed dealer sales people especially in regards to Clarity that I suspect that is the case a lot of the times.

    Now that Honda has made a public statement about it customers who have this information can correct a dealer who tells them it is no longer available in that market. If the salesperson truly didn't know, then once they realize it can be ordered and that they have a customer who wants one they might be willing to order one for them. If however they really don't want to order one I'm guessing they can't refuse but they can certainly require paying MSRP or even higher if they want to, forcing the customer to go to another dealer who will hopefully at least give them some type of discount.
     
  5. Lowell_Greenberg

    Lowell_Greenberg Active Member

    Well, I live in Oregon- and if Claritys can be sold anywhere it's here...and there are none.

    So dealers are none to anxious to put it on their lots (or I'm guessing be stuck with one they ordered for a customer).




    Sent from my SM-G975U using Tapatalk
     
  6. RYU

    RYU New Member

    Not sure if this has already been mentioned...

    I'm making some educated guesses to come up with the following...

    Facts:
    Honda sells Clarities at a loss.
    They stopped shipping units to anywhere but CA.
    They need the CARB EV credits in CA the most (i.e. it's a compliance car).

    Hypothesis: All stock is being allocated to CA whilst coupled with big discounts to move the volume needed IN CALIFORNIA.

    Honda's marketing dept is trying to spin things differently it but this is my theory. They'll happily take orders from the other 49 states but it's to their discretion to fill them or not. I'm sure they'll wait and see how it goes with the remaining 2019 inventory now for sale in CA.

    IMO once Honda meets the unit count they need, prices will go back to normal again. This is exactly what happened during the crazy lease deals for the Fiat 500e back in 2013. It won't last long IMO
     
  7. Tangible

    Tangible Active Member

    In the Boston suburbs I’m paying 22.5 cents per kWh.
     
  8. Nemesis

    Nemesis Member

    Yes, from Boston's Hyde Park area, I am paying the same lol. I began to mainly use free charge stations either at work, which is my main source of free power or other local free ChargePoint stations. Once in a while, I will plug into my Clippers Creek HCS 50P but that is not the norm anymore. I get great gas mileage from the cheap gas cost we are experiencing now, so it is almost a wash if I use paid electricity to charge my Clarity. Cheers.
     
  9. LAF

    LAF Active Member

    Driving EV may be wash financially compared to HV but that is fine with me. I would even pay extra for the serene feel of driving EV in local traffic.
     
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  10. 2002

    2002 Well-Known Member

    Well at least it's something we suspect, although to parse your sentence a little bit, it's like someone can say Honda sells blue cars, which is a true statement but that doesn't mean that Honda sells only blue cars. In the same way I am quite sure that Honda does not sell all Clarities at a loss, otherwise they would not have offered them for sale in all fifty states, most of which do not have regulations that push them into selling electric vehicles there.

    Honda itself of course doesn't sell to customers but to dealers, and I would assume that the Clarities dealer price including holdback provides Honda at least some profit, even if perhaps less profit than other vehicles. However in states where Honda needs ZEV credits they may choose to offer incentives to the dealer which cut into their profits, or in some cases we suspect the incentives actually result in a loss for Honda, but not really because the sales give them ZEV credits which affects the cash balance elsewhere in the books.

    Your theory is quite plausible, it is shared by many and is the most likely reason in my opinion for the pullout. There may be more factors going on behind the scenes that we don't know about, but at least on the surface we can conclude that most of this is driven by the fact that Clarity is a low profit car for Honda, and probably for dealers also if they have to discount it heavily to sell them, and probably a loss for Honda if they have to provide huge incentives to get the cars to sell in spite of massive tax incentives available to many buyers. So unless the car can sustain itself they will only place it in markets where the need for ZEV credits offsets the heavy discounts required to move the car. Currently that seems to be only California.

    I am still trying to figure out if the "still can be ordered in all 50 states" is just part of the spin to make it sound like they aren't really pulling out of the markets, or whether effectively it means the end of any appreciable number of sales in the other states. We have a quote from a district sales manager who says that the InsideEVs article that broke the story was inaccurate for saying the car is not being sold outside of California when actually can still be ordered. But like the "Honda sells blue cars" statement that says nothing about quantity, or in this case practicality. I am however glad that those who know about and want to purchase a Clarity can still get one outside of California, I just hope that they don't wind up having to pay MSRP for it, or have to argue with dealers to get them to order them one. If so then it becomes the equivalent of saying "Honda sells brown cars" (no offense to any owners of brown cars it's just not a popular color anymore).
     
  11. css28

    css28 Active Member

    After my Volt got totalled a few weeks ago, I ended up opting for a "bridge" car--something I could drive until the Clarity situation sorted itself out. As things currently stand, I can't get a Touring any closer than 480 miles from home in red or green (the real colors :) ). I just wasn't in the mood for a long road trip to fetch the car from a strange dealer.
    My bridge car is a 2 year old Nissan Leaf. I like it so much it might end up replacing our second car when and if a Clarity becomes available from a local dealer.
     
    Last edited: Aug 14, 2019
  12. DucRider

    DucRider Active Member

    I work with Oregon dealers for events promoting EV's. It's not that they don't want units for inventory, but that Honda will not allocate or ship them any. Not sure on the "can be ordered" logistics and how Honda differentiates a customer order from an order for stock.
     
  13. 2002

    2002 Well-Known Member

    That seems to be the real crux of the matter, unless I have totally misunderstood what Honda is saying, dealers cannot order cars for their stock but customers can order cars through dealers.

    For dealer stock orders the dealer effectively purchases the car from the manufacturer, although manufacturers don't require immediate payment, instead they essentially finance the purchase at a certain rate per month, which the dealer pays when they eventually sell the car. Manufacturers however generally subsidize a certain amount of the interest as part of the holdback that is paid to the dealer as a rebate when the car is sold, but if the car sits on the lot too long the interest begins to exceed or at least cut into the holdback, which is why dealers don't like cars that sit on their lots for a long time because the interest cuts into their profit.

    So how is customer ordering different? That I don't know and I would like to find out. Presumably the car does not at any point go into the dealers inventory, which could affect things in various ways, such as the dealer doesn't pay interest but probably the dealer also does not get a holdback or they get a reduced holdback. Does this mean dealers make less profit on cars ordered vs. cars on the lot? That I don't know, it just seems like dealers never seem enthusiastic about ordering cars. But one reason for that could be that a customer can change their mind later and cancel an order, whereas if a dealer thinks they can convince a customer to purchase a car on the lot then it's a done deal once the papers are signed. Also I suspect that dealers are mainly concentrated on reaching the current month sales targets, which they can achieve with cars on the lot, but orders are less predictable as to when or if the sale will actually take place.

    So then what does happen if an order is cancelled? Does the car then go into the dealer's inventory when it arrives just as if they had ordered it? I can't think of what else would happen since I'm sure the car won't be shipped back to Japan. Other than the dealer maybe finds another dealer in their dealer group who wants to take delivery of the car.

    Can dealers require a non-refundable deposit, if so is there a limit how much they can require? Do dealers have enough room in the price to discount from MSRP? If so do they, or is that rare? Can you get an order quote from one dealer, then go to another dealer and ask them to match it?

    I am asking these questions because probably like most people I have never ordered a car and thus I know nothing about it, but Honda has suddenly put Clarity into this situation. All we have to go on at the moment is that I am unaware of anyone looking for a Clarity who couldn't find one who was told by a dealer "there aren't any in this area but we can order one for you" and by that they meant factory order, not getting one from another dealer. So what happens when someone walks into a dealer and says "I want to order a Clarity, what is the best price you can give me?" I have no idea and I am really anxious to find out because that is what will really tell us whether this is just a change in distribution method, or whether it is mainly just spin.
     
  14. Danks

    Danks Active Member

    Back around February - March 2019 I went to two different dealers in Michigan and said, "I want to order a 2019 Clarity." The first dealer said they could not order one because Honda was not allocating any to Michigan. I posted that here and a forum member told me that their salesman at a different dealer said they could order one. I went to that dealer in March. paid a deposit, and they tried to order it. In June I was told that Honda did not fill the order and the explanation was that they are not allocating to Michigan. The only thing the dealer could do at that point was to try to get one from another dealer. The closest 2019 with the color and trim I wanted was in the Buffalo, NY area. I figured I could go there and get it for less than I would get it through the dealer, so I did.

    So my experience is that a customer cannot go to a dealer and order a car from Honda in Michigan. I expect that is true in other states as well. This may have changed since June and what the spokesperson said may be true. It may not have changed since June and what the spokesperson said may not be true.
     
    2002 likes this.
  15. Dan Albrich

    Dan Albrich Active Member

    My buddy bought a 2017 Hyundai PHEV and got government and utility rebates. I got excited about it. Went to find one, none on the west coast. Not kidding they vanished. One dealer told me there was a battery shortage. Whatever.

    Visited Eugene, OR Honda dealer, they had six Clarity's on the lot. Asking full MSRP for the Touring at $37500. This was September 2018. I got this down to $35000 (best I could do) and bought the car. Six months later, no Clarity's to be had anywhere in Oregon, and that's still the case.

    My point being these low-volume vehicles seem to suffer this fate. You almost have to get lucky with your timing and location to buy one.
    I'm glad I'm a lucky one that got the car. A few months after my purchase, the dealers got $6000 off Clarity, so the pricing was really good right as they vanished completely. Likely not coincidence. ​
     
    2002 likes this.
  16. 2002

    2002 Well-Known Member

    And Honda seems to have renewed the dealer incentive for Oregon, now $5,000 and it runs from July 9th to September 3rd. At least it is listed on the Costco website which has proved to be pretty accurate for California at least, although some dealers in California refuse to part with the $5,000 incentive, or at least they don't go down without a fight. Of course if dealers are forced to give up the incentive then there is no longer as much of an incentive for them to sell the car, which could be another reason why dealers have never really been enthusiastic about the car.

    On July 9th when the rebate was renewed Honda certainly knew that they were no longer accepting dealer inventory orders from Oregon, although they had not yet announced this publicly until their general statement released on August 6th. My guess is the $5,000 incentive only applies to cars in dealer inventory, as slim to non-existent as that was in Oregon even on July 9th. Otherwise why wouldn't an Oregon dealer say "Why of course I can order you a Clarity and I'll even give you $2,000 of MSRP" since they would likely make some regular profit at that price in addition to getting $5,000 from Honda.
     
  17. Wynn

    Wynn New Member

    My theory is that Honda is intentionally phasing out the Clarity PHEV to better position its next generation full EV models. The Chevy Volt is a perfect example of what Honda wants to avoid. PHEV is a transitional technology and once federal and state incentives ended, Chevy had little to show in growing its future vehicle lineup. Honda is probably saving these incentives to jump start their future EV ambitions.
     
  18. Robert_Alabama

    Robert_Alabama Active Member

    I think I agree. I'm not holding my breath for the Honda Pilot PHEV to show up. It looks like Lincoln (Aviator PHEV) and BMW (from what I read the upcoming 3 and 5 series sedans and X3 and X5 SUVs will all have nearly 50 miles of range) are the best bets for decent PHEVs in the next couple of years, albeit probably pricey. Mitsubishi upgraded the Outlander PHEV last year, but still hasn't sold the upgraded version in the US and even upgraded, it is probably about 30 miles range. Kia and Hyundai have not got enough range in the Optima and Sonata to make them real options for me. The Chrysler Pacifica Phev has decent range, but wife would never allow a minivan in the garage. I know that there are some others either already here or coming (Mercedes, Volvo, Porsche, and upcoming Jeep Wrangler - and I'm sure I left out a few), but either not a good fit or too little battery range. I just don't think PHEV vehicles with adequate battery range have been given a fair shake in the marketplace. Just no real advertisement or marketing push. I think this has led to the opinion that they have no place in the market and that EV is the way to go. But for me, I think EV is still at least 5 years away from a good alternative so I hope some good PHEV options hang in there.
     
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  19. Lowell_Greenberg

    Lowell_Greenberg Active Member

    Maybe. But based on the most recent posts, they are not being particularly honest or forthright with consumers. Can a dealer outside of CA order units or not?

    If batteries are in such short supply and contributing to the shortage- how does Toyota manage with the Prius Prime?

    Maybe manufacturing costs of a full electric/ hybrid versus PHEV is the deciding factor. Still, why didnt they figure out before going nation-wide that ZEV credits were not enough to justify their losses?


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  20. RickSE

    RickSE Active Member

    2002 and cokeb5 like this.

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