The auto industry is beginning to crank out more electric vehicles (EVs) to challenge Tesla, but there’s one big problem: not enough buyers.
Why it matters: The growing mismatch between EV supply and demand is a sign that even though consumers are showing more interest in EVs, they’re still wary about purchasing one because of price or charging concerns. [emphasis, links added]
- It’s a “Field of Dreams” moment for automakers making big bets on electrification — they’ve built the cars, and now they’re waiting for buyers to come, says Jonathan Gregory, senior manager of economic and industry insights at Cox Automotive.
Driving the news: Cox Automotive experts highlighted the swelling EV inventories during a recent midyear industry review for journalists and industry stakeholders.
- EV sales, which account for about 6.5% of the U.S. auto market so far this year, are expected to surpass one million units for the first time in 2023, Cox forecasts.
- A Cox survey found that 51% of consumers are now considering either a new or used EV, up from 38% in 2021.
- Tesla’s rapid expansion, plus new EVs from other brands, are fueling the interest — 33 new models are arriving this year, and more than 50 new or updated models are coming in 2024, Cox estimates.
Yes, but: Sales aren’t keeping up with that increased output.
Details: The nationwide supply of EVs in stock has swelled nearly 350% this year, to more than 92,000 units.
- That’s a 92-day supply — roughly three months’ worth of EVs, and nearly twice the industry average.
- For comparison, dealers have a relatively low 54 days’ worth of gasoline-powered vehicles in inventory as they rebound from pandemic-related supply chain interruptions.
- In normal times, there’s usually a 70-day supply.
- Notably, Cox’s inventory data doesn’t include Tesla, which sells direct to consumers.
The intrigue: Hybrid vehicles have much lower inventory levels, supporting Toyota’s argument that consumers want a stepping stone to fully electric cars.
Source: Car Pileup: Electric Vehicles Sitting Unsold On Dealer Lots – Climate Change Dispatch