EV inventories are swelling, and prices may drop soon

Despite strong sales, dealership EV inventories are growing, according to data from Cox Automotive (via Automotive News).

EVs are approaching 7% of the U.S. new car market, and they’re on track to surpass sales of one million units in the U.S. for the first time this year, Cox Automotive estimates. But the data also show that EVs aren’t flying off dealer lots.

Honda future dealership design for selling EVs - 2022

Honda future dealership design for selling EVs – 2022

Through the end of the second quarter, EV inventory in the U.S. is expected to surpass 90,000 units for the first time. For context, last year, when the EV supply was much tighter, the national inventory was around 21,000 units. As Cox Automotive notes, EV sales have increased, but not as quickly as the supply of vehicles.

Several factors are still holding back greater EV sales growth. In a June survey of dealers and consumers, Cox also found that dealers still aren’t as ready for the electric future as consumers are. And while consumers may be more enthusiastic than dealers, EV interest is far from universal.

Results of June 2023 Cox Automotive survey on EVs

Results of June 2023 Cox Automotive survey on EVs

Ipsos has concluded that consumer interest in EVs is lagging, in part because of cost misconceptions over the overall ownership cost of EVs, which may in fact be much lower than gasoline cars. Confusion over the federal EV tax credit price cap and rules that appeared to shift several times over the past year could be an issue as well.

The actual cost picture may ultimately favor EVs, though. Led by Tesla’s 20% price cut at the beginning of the year, some have suggested an EV price war is already happening, even as higher battery and manufacturing costs potentially push price parity with internal-combustion vehicles further toward 2030. For now, ample supply likely means EV deals may finally be coming—and at the very least, the price gouging is gone.

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