EVs Pile Up on Dealer Lots, But Demand Remains Strong

author: FutureCar Staff    

The transition to electric vehicles may not be smooth and will not happen evenly across the country. However, high "days' supply" numbers do not necessarily indicate a loss of consumer interest.

In July, studies showed that electric vehicles were sitting on dealer lots for longer periods compared to internal combustion vehicles. Recent reports suggest that they are now sitting for more than 100 days. But the apparent cooling demand is not as simple as it seems.

This is evident when looking at the volume of EVs sold by retailers in 2023. While 8.6 percent of the vehicles sold this year were all-electric, they only accounted for 6.7 percent of available inventory.

"The story that demand for EVs is slowing is patently false," said Tyson Jominy, vice president of data and analytics at JD Power. The data may appear unusual due to various factors at this particular moment in time.

The pandemic has disrupted supply metrics across the board, making them look unusual. Additionally, now that automakers can produce vehicles at their usual rates, it has magnified the days' supply metric for EVs, according to Jim Cain, a GM spokesperson.

Cain explained, "If you have low sales, which is common for newly launched vehicles, and rising inventory, which is also expected for these vehicles, you get a high days' supply number. The reading can be further misleading if a significant amount of that inventory is in transit to dealers and not available for sale."

Dealers are also grappling with the transition to increasing EV adoption, which will not occur uniformly across all markets. While EV sales have steadily grown in California, the same cannot be said for every region.

For example, Ford dealers in Texas experienced a sudden surge in demand for the F-150 Lightning. However, once early adopters received their orders and deliveries caught up, the majority of buyers preferred gas-powered trucks. This has resulted in a slowdown in EV sales in the state, according to Stephen Gilchrist, a dealer operator in the region.

Gilchrist stated, "We are in the infancy of this EV era. You're going to have some stops and starts as you gain higher adoption rates. A lot of people are starting to realize that the idea that we will all be driving EVs by 2030 is not accurate."

However, considering the size of the country, there are still enough buyers who want EVs, so it is premature to conclude that demand is cooling. Mike Sullivan, the owner of the LACarGuy network of dealerships, believes that EVs are destined to be a major force in the automotive industry.

"I have no question of where we're going," he said. "It's just a matter of when we get there."

FutureCar Staff