“The jury is out on what will happen to all that inventory,” says Charlie Chesbrough, Cox Automotive’s senior economist.
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Electric vehicle sales are growing but something else is increasing in an eyebrow-raising way: the high number of unsold EVs on dealer lots.
In June, EV days’ supply – a measure of inventory levels in the U.S. – approached 100 days, nearly twice the industrywide average.
“The jury is out on what will happen to all that inventory,” Charlie Chesbrough, Cox Automotive’s senior economist, tells a media gathering in metro Detroit. “EV sales are rising but not to the same extent of inventory.”
Days’ supplies of EVs and vehicles with internal-combustion engines are “moving in different directions,” he says, noting that in many parts of the country new-EV stock levels are increasing faster than consumers are buying.
In this year’s second quarter, the average weekly inventory of EVs is 90,000 units, according to Cox Automotive. That’s a 342% increase over 2022’s second quarter.
The increase is due in part to automakers briskly introducing new battery-electric models; about 30 expected this year, 50 next.
Purchases “are not keeping pace with availability,” Cox Automotive’s chief economist Jonathan Smoke tells auto journalists.
A study by his company points to a gap between consumers’ EV enthusiasm and actual purchases.
The survey of 1,024 consumers and 152 dealers also indicates a lack of EV readiness among U.S. automotive dealers regarding sales and service.
“Education for both consumers and dealers remains a critical factor in driving widespread confidence and adoption of electric vehicles,” says Kayla Reynolds, a Cox Automotive researcher.
“For dealers specifically, preparation is paramount, and our findings emphasize the urgency of equipping dealers with EV sales and servicing capabilities,” she says.
Cox Automotive is forecasting EV sales to hit a record 1 million units in the U.S. in 2023. That’s double the 2021 sales.
The industry’s sales growth has been powered by Tesla’s rapid expansion as well as other automakers joining the game.
EVs will account for about 8% of total 2023 U.S. new-vehicle sales, which Cox Automotive estimates will total 15 million units. On the used-vehicle side, EV market share is about 1%.
The study says EV consideration is well ahead of sales. Affordability remains the top obstacle for would-be EV buyers, with 43% of intenders noting that EVs cost more than vehicles with internal-combustion engines.
Other purchase barriers are abating, though. For example, in 2021, 40% of intenders cited a lack of charging stations as a top roadblock. That number has fallen to 32%.
Charging concerns drop once people buy an EV, says Pamposh Zutshi, senior director-product management at WiTricity, a charger provider.
“Our research indicates EV owners love their vehicles,” he says at a Society of Automotive Analysts webinar. “Those who made the leap of faith in buying an EV are 50% less likely to worry about range. They are also less likely to worry about how long charging takes.”
According to the Cox Automotive survey, 53% of consumers feel EVs are the future and will largely replace gas engines over time. But only 31% of surveyed dealers think that. Nearly half say EVs still need to prove themselves in the marketplace.
Yet, dealers see electric vehicles as important to the growth of their business, both in sales (55%) and service (57%).
To some extent, consumers and dealers see EVs differently, says Jonathan Gregory, Cox Automotive’s senior manager-economic and industry insights.
“Consumers are showing an interest, some dealers are showing skepticism,” he says at the media meeting.
Meanwhile, an iSeeCars analysis indicates EV and plug-in hybrid-electric vehicle sales rates are tailing off in West Coast “green” states compared with other parts of the country.
Karl Brauer, iSeeCars.com’s executive analyst, calls it “troubling to see states like Oregon, California and Washington slowing in green-vehicle adoption.”
Although those three states lead the country in EV and hybrid vehicle market share, “they are now among the slowest in growing their market share for these vehicles,” he says. “If this pattern continues with other states, it could prove very challenging to get the U.S. anywhere close to 50% market share for alternative-fuel vehicles in the next 10 years.”
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