Stocks of electric vehicles (EVs) are piling up in the U.S. In their attempts to challenge the dominance of Tesla, automobile manufacturers seem to be encountering another challenge: a lack of buyers.
A midyear industry review from the U.S.-based trade magazine Cox Automotive shows a growing disparity between EV production and EV sales. Though car buyers are showing interest in EVs, high price tags and charging concerns are still holding them back from actually purchasing them.
The increasing scope of fully electric cars on the market—due to the release of new models from Tesla and other carmakers, along with government subsidies for EV car purchases—has helped pique consumer interest, according to Cox Automotive. The publication forecasts that EV sales are expected to surpass one million units in 2023, the first time they have breached the million-mark threshold. A survey it conducted also found that 51% of consumers are now considering buying either a new or used EV, which is up from 38% in 2021.
Still, the high number of unsold cars sitting at dealerships is concerning for the auto industry and shows that consumer uptake of fully electric cars (versus the more popular hybrids) is slower than hoped for.
Jonathan Gregory, senior manager of economic and industry insights at the Cox Automotive company, said that car makers have built the cars, and now they’re waiting for buyers to come.
How long they will have to wait is the question.
In the U.S., the nationwide supply of EVs in stock has grown exponentially, nearly 350% this year, reaching more than 92,000 cars coming off assembly lines. The production has led to excess stock. The large number of EVs amounts to a 92-day supply sitting on lots, which is nearly twice the industry average for car inventory at dealerships.
These numbers don’t include Tesla’s stocks, as the company sells directly to customers.
At the other end of the spectrum, gasoline-powered car stocks are unusually low, sitting currently at 54 days, due, according to Cox Automotive, to production still recovering from pandemic-related supply chain interruptions. The normal industry average for car stocks at dealerships is 70 days. There is also a dearth of supply in hybrid cars, with a relatively tight 44-day average stock at dealerships, according to Cox Automotive. Toyota’s Prius and RAV4 hybrids and plug-in hybrids have just a 30-day supply.
Analysts see these numbers supporting Toyota’s argument that consumers are willing to experiment but not ready to dive into fully electric cars.
Notably, Toyota’s only fully electric model, the Bz4X, has a 101-day supply in the U.S. While the carmaker recently announced it had developed new battery technology that could triple the life of electric car batteries as well as a three-row electric SUV, it still intends to maintain a balanced mix of hybrids, plug-in hybrids, and pure EVs for the foreseeable future.
Fully electric luxury cars are selling the worst. According to Cox Automotive’s data, Genesis, the Korean luxury brand, has almost a year’s supply of its nearly $82,000 G80 sedan sitting on dealership lots. Only 18 had been sold in the 30 days leading up to June 29th, and 210 were still in stock nationwide.
Audi’s Q4 e-tron and Q8 e-tron and the GMC Hummer EV SUV are also sitting on lots in quantities representing inventories that will likely last well over 100 days.
All these cars sell at prices that make them ineligible for federal tax credits. There are also plenty of imported models, such as the Kia EV6, Hyundai Ioniq 5, and Nissan Ariya that also do not qualify for tax credits.
Ford’s once well-selling Mustang Mach-E now has a 117-day supply. Ford remains hopeful, though, saying it anticipates stronger sales in the third quarter of this year.
The European market mirrors the American one, with hybrid car sales surpassing other electric car sales and, despite overall growth in electric car sales, the market slumped in recent months due to consumer fears over a recession and the end of subsidies for electric car purchases in Norway, one of Europe’s highest electric car-buying nations, according to a recent report by Counterpoint Research.
