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The U.S. car price bubble has burst, leading to fear within the auto industry as demand declines due to rising interest rates affecting auto loan costs. This downturn even extends to the electric vehicle market, with Tesla's prices currently $5,000 lower than the average U.S. car. Industry experts warn manufacturers, dealers, and lenders to prepare for significant price drops in 2023 as unsold inventory accumulates. However, despite this potential for lower prices, buyers should not expect new vehicles to become affordable anytime soon, as affordability issues are set to continue throughout the year. The video aims to explain these developments further.