EVs Still in High Demand Despite Increasing Inventory

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【Summary】Experts say that despite high numbers of electric vehicles (EVs) sitting on dealer lots for over 100 days, it doesn't mean that consumer demand for EVs has decreased. The pandemic and the production rates of automakers have affected supply metrics, leading to the perception of cooling demand. The transition to EVs will not happen evenly across the country, with some markets experiencing steady growth while others see slower sales.

FutureCar Staff Aug 15, 2023 9:43 AM PT

EVs Still in High Demand Despite Increasing Inventory

The transition to electric vehicles won't be smooth, and it won't happen evenly across the country, but high "days' supply" numbers don't necessarily mean consumers have lost interest.

A recent report suggests that electric vehicles are sitting on dealer lots for more than 100 days, indicating a potential cooling demand. However, this data doesn't tell the whole story.

When looking at the volume of EVs sold by retailers in 2023, it becomes clear that demand for EVs is not slowing down. While they accounted for 8.6 percent of vehicles sold, they only made up 6.7 percent of available inventory.

According to Tyson Jominy, vice president of data and analytics at JD Power, the perception of slowing demand for EVs is false. The unusual data can be attributed to various factors, including the effects of the pandemic on supply metrics and the production rates of automakers.

Jim Cain, a GM spokesperson, explains that low sales and rising inventory for newly launched vehicles can result in high days' supply numbers. This reading can be misleading if a significant portion of the inventory is in transit to dealers and not available for sale.

The transition to increasing EV adoption is not happening uniformly across all markets. While dealers in California have seen steady growth in EV sales, other regions, like Texas, have experienced fluctuations. Ford dealers in Texas initially saw strong demand for the F-150 Lightning, but sales slowed down once early adopters received their orders.

Stephen Gilchrist, a dealer operator in Texas, acknowledges that the EV era is in its infancy and expects some stops and starts as adoption rates increase. He believes that the idea of everyone driving EVs by 2030 is not accurate.

Despite regional variations, there is still a significant demand for EVs in the country. Mike Sullivan, the owner of the LACarGuy network of dealerships, is confident that EVs will become a major force in the automotive industry. The pace of adoption may vary, but the direction is clear.