The Curious Case of Unsold Electric Vehicles
As electric vehicles (EVs) steadily roll off the production lines to challenge Tesla, they’re facing an unexpected obstacle — a shortage of eager buyers. A disconnect between EV supply and demand is becoming evident, hinting at consumer reluctance due to worries about pricing or charging logistics.
“It’s a ‘Field of Dreams’ moment for automakers,” says Jonathan Gregory from Cox Automotive. They’ve constructed the vehicles and now anticipate customers rushing in to purchase. The truth, however, may not be that straightforward.
Recent industry reviews revealed a surplus in EV inventories. Despite accounting for about 6.5% of the U.S. auto market this year and projected to surpass 1 million units in 2023, sales aren’t on pace with production. A Cox survey highlights a rise in consumer consideration for new or used EVs, up from 38% in 2021 to 51% this year, Axios reports.
Fueling this interest are Tesla’s rapid expansion and an influx of new models from other brands — 33 new models launching this year and over 50 updated or new models expected in 2024. Despite the rising interest, the actual sales of these electric marvels are lagging behind the production rates.
This year, the nationwide stock of EVs surged nearly 350% to more than 92,000 units. For perspective, this represents a three-month supply, double the industry average. In contrast, gasoline-powered vehicles, recuperating from pandemic-induced supply chain hiccups, only have a 54-day supply.
Some brands are shouldering more of this inventory burden than others. Genesis, a Korean luxury brand, only sold 18 of its Electrified G80 sedans in the last 30 days leading up to June 29, leaving a staggering 350-day supply. Other luxury models like Audi’s Q4 e-tron, Q8 e-tron, and the GMC Hummer EV SUV also have high inventories, possibly due to their ineligibility for federal tax credits.
Amidst this, hybrid vehicles offer a contrasting tale with lower inventory levels, indicating a consumer preference for a gradual transition to fully electric cars. As per Cox’s data, there’s a relatively slim 44-day supply of hybrids industrywide.
Moving forward, the auto industry holds hope for improvements. With the expansion of charging infrastructure and EV prices predicted to match those of gasoline vehicles by 2025, John Murphy, an auto analyst at Bank of America Securities, suggests that the future will witness a surge in EV buyers. Until then, automakers wait with bated breath for the tide to turn.
