The auto industry is producing more electric vehicles, but a lack of buyers is a growing issue.
The EV industry is experiencing a supply and demand mismatch, which shows that although people are more interested in purchasing EVs, they are holding back because of concerns over pricing and charging.
The stock of electric vehicles available nationwide has increased by almost 350% this year, reaching over 92,000 units. That represents a 92-day supply, or roughly three months’ worth of EVs and nearly twice the industry average, according to Cox.
By comparison, dealers have around a 54-day supply of gasoline-powered vehicles in inventory. A 70-day supply is common for ICE vehicles, but inventory challenges have kept supply low.
It’s not all gloom and doom. Cox Automotive predicts that electric vehicle sales, currently representing 6.5% of U.S. auto sales in 2021, will exceed one million units this year for the first time.
And the results of a recent Cox survey show 51% of consumers are considering purchasing either a new or used EV, up from 38% in 2021. Fueling their interest are 33 new EV 2023 models and over 50 new or updated models for 2024, notes Cox.
Cox reports some brands are seeing higher EV inventories than others. For example, Genesis has 210 EVs in stock nationwide — a 350-day supply. Audi’s Q4 e-tron and Q8 e-tron and the GMC Hummer EV SUV have inventories well over 100 days.
Cox Automotive suggests a few reasons for the trends:
Tesla's price-cutting strategy may be taking a toll.
Higher priced EVs, such as the Audi Q4 e-tron, do not qualify for tax credits.
Consumers are choosing a hybrid vehicle as a stepping stone to EVs. Cox Automotive reports a 44-day supply of hybrids industrywide, with Toyota supply dipping under 30 days each for Prius and RAV4 hybrids and plug-in hybrids.
As more charging stations are installed and EV prices fall, Cox predicts sales will pick up. Bank of America Securities auto analyst John Murphy predicts that EV prices will be on par with gasoline vehicles by 2025.
