EVs Still in High Demand Despite Increasing Inventory

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 remaining on dealer lots for longer periods compared to internal combustion vehicles. Recent reports suggest that EVs are now sitting for over 100 days. However, the apparent decline in demand is not as straightforward as it may seem.

This point is exemplified by the volume of EVs sold by retailers in 2023. Although 8.6 percent of 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," stated Tyson Jominy, vice president of data and analytics at JD Power. The peculiar data is primarily influenced by the current circumstances.

The pandemic has caused supply metrics to appear unusual across the board. As automakers regain their ability to produce vehicles at their usual rates, this is magnifying the days' supply metric for EVs, according to Jim Cain, a GM spokesperson.

"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," explained Cain. "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 increased EV adoption, which will not occur uniformly 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 favored gas-powered trucks. As a result, sales in the state are slowing, according to Stephen Gilchrist, a dealer operator with 18 locations in the region.

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

However, it is important to note that there is still significant demand for EVs in various parts of the country, indicating that it is premature to conclude that demand is cooling. According to Mike Sullivan, owner of the LACarGuy network of dealerships, it is evident that EVs will become a major force in the automotive industry.

"I have no question of where we're going," he stated. "It's just the pace of when we get there."

FutureCar Staff