CARGURUS 2022 REVIEW & 2023 OUTLOOK - 2022 CARGURUS, INC. ALL RIGHTS RESERVED.
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CarGurus 2022 Review & 2023 Outlook ©12022 CarGurus, Inc. All Rights Reserved.
2022 Intelligence
Snapshots
© 2021 CarGurus, Inc. All Rights Reserved.2022 Intelligence Snapshots 2022 was another year of change for the auto industry. With an eye towards 2023, we examined three Intelligence Snapshots covering the following: • Most viewed vehicles– The most viewed vehicles on CarGurus in 2022 reflect the unique factors that influence each buying segment, including new, certified pre- owned, and non-certified pre-owned. • EVs – Interest in EVs surged when gas prices spiked in June, however that interest, particularly for used EVs, looks to have been fleeting. • Wealth & Luxury – With the large declines in the cryptocurrency and stock markets, the luxury market has felt some bumps. Previously high-flying models are seeing notable pricing declines. 3 © 2022 CarGurus, Inc. All Rights Reserved.
Most viewed vehicles 4 © 2021 CarGurus, Inc. All Rights Reserved.
Consumers viewing different vehicles for new, CPO, and non-CPO
used
• New – Consumer interest was driven by new model names: the Maverick, Bronco,
Mustang Mach-E, GV80, GV70, and EV6 all launched in 2021 and 2022. This
suggests that consumers are drawn by and interested in new nameplates.
• CPO - CPO offers a value-friendly door to luxury nameplates for aspirational
shoppers. This segment was dominated by Mercedes (top-three spots) and BMW
(3 additional spots). These are two of the most heritage-rich names in luxury, and
their strong CPO programs make used models attractive.
• Non-CPO Used – This segment offers a more eclectic mix, but it still over-indexes
in premium and luxury marques (7 of 10). Interest in the non-CPO used market
shows that performance, luxury, and design are still major levers for value-driven
shoppers.
*Methodology: CarGurus examined the total number of unique viewers
compared to the number of vehicles available. That resulting value was
compared with the average to determine a popularity ratio that represents the
increased level of interest compared to the average vehicle.
5 © 2022 CarGurus, Inc. All Rights Reserved.Most viewed new vehicles
US: Top 10 new view ratio*
2022 YTD
5
4
3
2
1
0
Ford Maverick Chevrolet Chevrolet Ford Bronco Ford Mustang Genesis GV80 Genesis GV70 Toyota RAV4 Kia EV6 Ford Mustang
Camaro Corvette Mach-E Prime
Source: CarGurus * total unique views/total inventory compared to average, minimum 10,000 vehicles
6 © 2022 CarGurus, Inc. All Rights Reserved.Most viewed certified pre-owned (CPO)
US: Top 10 used CPO view ratio*
2022 YTD
4
3
2
1
0
Mercedes E- Mercedes Mercedes C- GMC Sierra BMW 5 Series BMW 3 Series Toyota Tundra BMW X5 Ford F-150 Toyota RAM 1500
Class GLE-Class Class 1500 4Runner
Source: CarGurus * total unique views/total inventory multiple over average, minimum 10,000 vehicles
7 © 2022 CarGurus, Inc. All Rights Reserved.Most viewed non-CPO used vehicles
US: Top 10 used non-CPO view ratio*
2022 YTD
3
2.5
2
1.5
1
0.5
0
Mercedes S- Porsche 911 Dodge RAM BMW 7 Series Tesla Model S Acura TL INFINITI G37 Audi A5 Chevrolet Honda Accord Mazda MX-5
Class 2500 Corvette Coupe Miata
Source: CarGurus * total unique views/total inventory multiple over average, minimum 10,000 vehicles
8 © 2022 CarGurus, Inc. All Rights Reserved.EV demand 9 © 2021 CarGurus, Inc. All Rights Reserved.
Are declining gas prices impacting EV demand? • Earlier in the year we looked at how rising gas prices were contributing to a surge in EV interest. With gas prices now down year-over-year, we looked back to see if the shift in gas prices was causing any decline in EV interest. • While the influx of new EVs has helped to keep EV views high, the decline in gas prices looks to have reduced interest in used EVs. • Availability of new and used EVs is less of an issue than it was over the summer and prices for used EVs continue to come down. 10 © 2022 CarGurus, Inc. All Rights Reserved.
Used EV interest has moderated with declining gas prices
US: New & used EV/non-EV demand* ratio, average regular gas price
February 2022 – November 2022
$5.2 5
$5.0 4.5
$4.8 4
$4.6
3.5
$4.4
3
$4.2
2.5
$4.0
2
$3.8
$3.6 1.5
$3.4 1
$3.2 0.5
/1 2
02 / 22
03 / 22
03 / 22
03 / 22
04 / 22
04 / 22
04 / 22
05 / 22
05 / 22
05 / 22
06 / 22
06 / 22
06 / 22
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07 / 22
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08 / 22
08 / 22
09 / 22
09 / 22
09 / 22
10 / 22
10 / 22
10 / 22
11 / 22
11 / 22
11 / 22
22
/2
8/
1
1
1
3
3
3
2
2
2
2
2
2
1
1
1
1
1
1
1
0
0
0
9
9
9
9
9
9
8
8
/0
/2
/0
/1
/2
/0
/1
/2
/0
/1
/2
/0
/1
/2
/0
/1
/2
/3
/1
/2
/3
/0
/1
/2
/0
/1
/2
/0
/1
/2
02
02
Gas Prices (L-Axis) New EV (R-Axis) Used EV (R-Axis)
Source: CarGurus, Gas Buddy *A rolling 7-day average of US vehicle views/inventory indexed to January 2022
11 © 2022 CarGurus, Inc. All Rights Reserved.EV availability is no longer an issue
US: New & Used EV inventory rolling 7-day average indexed to February 1st
February 2022 – November 2022
2.5
2.0
1.5
1.0
0.5
0.0
Feb 22 Mar 22 Apr 22 May 22 Jun 22 Jul 22 Aug 22 Sep 22 Oct 22 Nov 22
New Used
Source: CarGurus
12 © 2022 CarGurus, Inc. All Rights Reserved.EV inventory remains concentrated
US: New EV inventory % by state US: Used EV inventory % by state
November 2022 November 2022
0.1% 0.01%
26% 21%
Source: CarGurus
13 © 2022 CarGurus, Inc. All Rights Reserved.Used EV prices moderating
US: Rolling 7-day average of listing prices of new & used non-D2C* EVs
February 2022 – November 2022 (thousands $)
$75
$70
$65
$60
$55
$50
$45
$40
Feb 22 Mar 22 Apr 22 May 22 Jun 22 Jul 22 Aug 22 Sep 22 Oct 22 Nov 22
New Used
Source: CarGurus *EVs that are sold via dealers
14 © 2022 CarGurus, Inc. All Rights Reserved.Wealth & Luxury 15 © 2021 CarGurus, Inc. All Rights Reserved.
Is the stock market/crypto slowdown impacting luxury vehicles? • Inventory levels for vehicles priced over $100k are going up at a rate faster than total used vehicles, suggesting that consumers may be offloading high-priced vehicles. • The G-Class (G Wagon) was a staple vehicle for the crypto crowd and has seen its prices fall in line with the decline of Bitcoin prices. • Teslas are in a particularly painful crunch where the decline in EV interest and declining stock market is creating a particular reduction in prices. 16 © 2022 CarGurus, Inc. All Rights Reserved.
Inventory of used vehicles over $100k outpacing industry average
US: CarGurus Used Vehicle Availability Index*
January 2020 to November 2022
115
110
105
100
95
90
85
80
Jan 21 Mar 21 May 21 Jul 21 Sep 21 Nov 21 Jan 22 Mar 22 May 22 Jul 22 Sep 22 Nov 22
CG Used Average >$100k
Source: CarGurus
17 © 2022 CarGurus, Inc. All Rights Reserved.G-Class prices have been on the decline in line with Bitcoin prices
US: Average G-Class used listing price vs Bitcoin price US: Average G-Class used listing price vs S&P 500
November 2021 to November 2022 (month end inventory, thousands $) November 2021 to November 2022 (month end inventory, thousands $)
$210 $60 $210 4900
Thousands
$55 $200 4700
$200
$50
$190 $190 4500
$45
$180 $180 4300
$40
$170 $35 $170 4100
$30
$160 $160 3900
$25
$150 $150 3700
$20
$140 $15 $140 3500
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
21 21 22 22 22 22 22 22 22 22 22 22 22 21 21 22 22 22 22 22 22 22 22 22 22 22
G-Class S&P 500 (R-Axis)
G-Class Bitcoin (R-Axis)
Source: CarGurus, Yahoo Finance
18 © 2022 CarGurus, Inc. All Rights Reserved.G-Class price declines are overtaking the market
US: Average used vehicle listing price G-Class vs CG used average US: Average used vehicle listing price select vehicle comparison
November 2021 to November 2022 (month end inventory, thousands $) (month end inventory, thousands $)
$200 $32.5 Make Model YoY % Peak %
Thousands
Variance Variance
$190
$32.0
$180
CG Used Average -1.0% -5.9%
$31.5
$170
Mercedes-
$31.0 G-Class -25.2% -27.5%
$160
Benz
$30.5
$150
Lamborghini Urus -6.1% -11.2%
$140 $30.0
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
21 21 22 22 22 22 22 22 22 22 22 22 22
G-Class CG Average (R-Axis)
Rolls-Royce Cullinan -7.5% -15.1%
Source: CarGurus
19 © 2022 CarGurus, Inc. All Rights Reserved.Tesla average prices are trending down from their peak
US: Average used vehicle listing price select models US: Average used vehicle listing price
November 2021 to November 2022 (month end inventory, thousands $) (month end inventory, thousands $)
$100
Model YoY % Variance Peak % Variance
$90
CG Used Average -1.0% -5.9%
$80
$70
Model X -5.0% -18.3%
$60
Model S -20.8% -20.8%
$50
Model Y -9.1% -16.6%
$40
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
21 21 22 22 22 22 22 22 22 22 22 22 22
Model X Model S Model Y Model 3
Model 3 -10.7% -18.1%
Source: CarGurus
20 © 2022 CarGurus, Inc. All Rights Reserved.2023 Outlook
© 2021 CarGurus, Inc. All Rights Reserved.Three trends for 2023 • Economic Outlook – With most economic forecasts predicting a slowdown or a recession in 2023 there is uncertainty about how consumer demand will fare due to rising interest rates and ongoing inflation. • Prices – Used prices are starting to come down, however the question is now shifting to how much further they will decline. Also, will the decline in used prices combined with still high new prices lead to a switch in sales demand. • New Inventory – With a late-year surge in new inventory, particularly for pickups, we’ll soon be able to tell if OEMs/dealers are serious about keeping inventory levels lower to keep the pricing power they’ve gained in the last two years. 22 © 2022 CarGurus, Inc. All Rights Reserved.
Supply is improving, but demand is now the question
Vehicle production has picked up, leading to improving inventory supply. However, with economic uncertainty on
the horizon, the question is how strong consumer demand will be in 2023.
US: New light vehicle sales forecast
2018 – 2023f (millions)
18
17
17
16
16
15
15
14
14
13
2018 2019 2020 2021 2022 2023
Actual Forecast Range Low Forecast Range High
Source: BEA, CarGurus Analysis
23 © 2022 CarGurus, Inc. All Rights Reserved.Prices are declining, but economy uncertainty could impact demand
While there remains a chance that declining prices could stoke more demand, it’s still likely that used sales will see
a further small decline next year.
US: Used light vehicle sales forecast
2018 – 2023f (millions)
40
39
38
37
36
35
34
33
2018 2019 2020 2021 2022 2023
Actual Forecast Range Low Forecast Range High
Source: Polk by S&P Global, CarGurus Analysis
24 © 2022 CarGurus, Inc. All Rights Reserved.About this Presentation This presentation contains estimates and other statistical data, including those relating to our industry and the market in which we operate, that we have obtained or derived from internal data and external sources, including industry publications and reports, as well as other publicly available information prepared by a number of third-parties. These external data sources generally indicate that they have obtained their information from sources believed to be reliable, but do not guarantee the accuracy and completeness of their information. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates, as there is no assurance that any of them will be reached. Based on our experience, we believe that these third-party studies and industry publications and reports are reliable and that the conclusions contained therein are reasonable. In addition, you are cautioned not to rely on our extrapolations of internal data and external sources as these are estimates involving a number of assumptions and limitations, which we are unable to ensure will be reached. CarGurus® is a registered trademark of CarGurus, Inc. All other product names, trademarks and registered trademarks are property of their respective owners. © 2022 CarGurus, Inc. All Rights Reserved. 25 © 2022 CarGurus, Inc. All Rights Reserved.
Cautionary Note Regarding Forward-Looking Statements Certain information contained in this presentation may include “forward-looking statements.” We may, in some cases, use terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “likely,” “may,” “might,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “target,” “will,” “would,” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. In particular, statements in this presentation regarding industry trends and projections of vehicle volume and sales value are examples of such forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties as may be detailed from time to time in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and other reports we file with the Securities and Exchange Commission. These factors could cause actual results and developments to be materially different from those expressed in or implied by such statements. Forward-looking statements do not guarantee future performance and actual results may differ materially from those projected. The forward-looking statements are made only as of the date of this presentation, and we undertake no obligation to update such forward-looking statements to reflect subsequent events or circumstance. This presentation also contains estimates and other statistical data, including those relating to our industry and the market in which we operate, that we have obtained or derived from internal data and external sources, including industry publications and reports, as well as other publicly available information prepared by a number of third-parties. These external data sources generally indicate that they have obtained their information from sources believed to be reliable, but do not guarantee the accuracy and completeness of their information. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates, as there is no assurance that any of them will be reached. Based on our experience, we believe that these third-party studies and industry publications and reports are reliable and that the conclusions contained therein are reasonable. In addition, you are cautioned not to rely on our extrapolations of internal data and external sources as these are estimates involving a number of assumptions and limitations, which we are unable to ensure will be reached. CarGurus® is a registered trademark of CarGurus, Inc. All other product names, trademarks and registered trademarks are property of their respective owners. © 2022 CarGurus, Inc. All Rights Reserved. 26 © 2022 CarGurus, Inc. All Rights Reserved.
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