EVs Piling Up, Buyers Still Interested

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 revealed that electric vehicles were staying on dealer lots for longer periods compared to internal combustion vehicles. Recent reports now suggest that they are sitting for over 100 days. However, the apparent cooling demand is not as straightforward as it seems.

An example that highlights this point is the volume of electric vehicles sold by retailers in 2023. Although 8.6 percent of vehicles sold this year were electric, they only accounted for 6.7 percent of the available inventory.

"The story that demand for EVs is slowing is patently false," stated Tyson Jominy, vice president of data and analytics at JD Power. He explained that the unusual data can be attributed to the current circumstances.

The pandemic has caused supply metrics to appear unusual across the board. Additionally, now that automakers can produce vehicles at their usual rates, it magnifies the days' supply metric for electric vehicles, according to Jim Cain, a GM spokesperson.

Cain further explained, "If you have low sales, which is common for vehicles that are launching, and rising inventory, which is also expected for launch 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 facing the challenge of managing the transition to increased electric vehicle adoption, which will not occur evenly across all markets. While EV sales have steadily grown in California, this has not been the case everywhere.

For example, Ford dealers in Texas experienced a sudden surge in demand for the F-150 Lightning. However, once the early adopters had placed their orders and deliveries caught up, the majority of buyers preferred gas-powered trucks. As a result, sales in the state have slowed down, according to Stephen Gilchrist, a dealer operator with 18 locations 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."

Despite these variations, there is still significant demand for EVs in the country. It is too early to conclude that demand is cooling. Mike Sullivan, the owner of the LACarGuy network of dealerships, believes that EVs are destined to become 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 will get there."

FutureCar Staff