Kelly Blue Book parent company Cox Automotive has released data showing that at the end of the second quarter, American car dealers had over 92,000 electric vehicles (EVs) on their lots unsold. One year prior, that figure was 21,000.
When measuring inventory however, car dealers do not focus on the raw number of cars, but rather calculate a metric referred to in the industry as “days of inventory,” which measures how long it would take to sell all of the current inventory, if there were no new shipments of cars to replace them.
Traditionally dealers sought to maintain a roughly 60 day supply of cars on hand in their lot, and another 15 days worth of vehicle sales on order or in transit. Those numbers could vary based on location as well as customer traffic and sales rate. Also, the numbers are adapted to local tastes in vehicles, with dealers in some regions in America preferring an oversupply of pickups, while other areas might prefer more environmentally friendly vehicles.
Looking at inventory days, dealers had roughly 51 days worth of new cars on their lots as of the end of the second quarter, according to Cox data. However they had 92 days worth of EVs.
Analysts note that the number means that the current production and delivery rate for EVs from most manufacturers is already too high, and yet, every manufacturer is in the process of accelerating that rate.
On the bright side the sales percentage of EVs is increasing, according to Cox data. In 2022, EVs comprised 5.8% of new car purchases. As of the first quarter of 2023, that metric had risen to 7%.
Cox Automotive Chief Economist Jonathan Smoke noted that now that every automaker has at least one EV for sale, and EVs are showing up on the used market, the industry is about to get a crash course in the finer nuances of EV demand.
In an interview with the industry publication Automotive News, Smoke said, “Up until now, this has been a Tesla, Nissan, GM story and a little bit of Volkswagen. The critical point is that it finally means something in every part of the industry, but it also means we’ve got ample opportunity to find where it’s successful and where it’s not quite as successful.”
Cox data showed that the large number of EVs does not mean they are easily acquirable everywhere, since the vehicles are actually concentrated only in certain areas.
A Sierra Club survey taken recently found that two thirds of car dealerships did not have any EVs on their lots, and they were not looking to acquire any. A Cox Automotive survey found much the same thing, with less than a third of car dealerships saying they felt EVs were the future of the industry.
However over half of the 1024 people shopping for a new car who were surveyed by Cox reported feeling that EVs were the future of transportation. Over half said they would consider buying an EV in the next year, which was an increase of 38% from the same survey a year prior.
Analysts note that the automotive companies are more enthused about the future of EVs that the dealers who sell them. Over 80% of dealers who were surveyed reported that their supplier of vehicles required they invest in infrastructure to sell and service EVs.
