In a significant development for the auto industry, the demand-supply dynamics of electric vehicles (EVs) have finally reached a turning point. Recent research conducted by Cox Automotive reveals that American car dealerships are now experiencing a higher availability of EVs compared to their gas-powered counterparts.
During the second quarter of 2023, the average inventory supply of electric vehicles increased to 92 days, a substantial surge from a mere 36 days recorded a year ago. In contrast, the overall new vehicle supply across the industry stood at 51 days in the same quarter.
The metric of “days’ supply” is utilized to measure the duration a vehicle typically remains in a dealer’s inventory before being sold. Cox Automotive clarified that this figure encompasses vehicles in various stages, including those in progress and in transit, not solely limited to vehicles sitting on dealership lots.
Although EVs spend more time on dealership lots, these numbers suggest that the sales of electric vehicles are accelerating at a faster pace than internal combustion engine (ICE) vehicles, indicating an expanding market share. Notably, in the first quarter of 2023, electric vehicles accounted for an impressive seven percent of new car sales.
One contributing factor to the extended stay of EVs in dealership inventory may lie in the fact that the technology is no longer considered entirely new. As used EVs begin to enter the market, these vehicles exhibit increased longevity, further bolstering their presence.
This development is particularly encouraging for consumers, as over half of them expressed their intent to consider purchasing an EV within the next 12 months. While the allure of lower maintenance costs, ownership expenses, and environmental benefits continues to attract buyers, the relatively high manufacturer’s suggested retail prices (MSRPs) of most EVs remain a significant barrier for many prospective purchasers.
Interestingly, automobile dealers exhibit less conviction compared to buyers. Out of the 152 dealers surveyed by Cox, fewer than 33 percent believed that EVs represented the future of the industry. Half of the surveyed dealers expressed the opinion that these vehicles still need more time to prove their mettle in the market. Regardless, automakers are pressuring around 80 percent of dealers to invest in electrification.
With EV supply surpassing gas-powered vehicles, the automotive landscape is undergoing a transformative shift. This evolving trend brings hope for increased adoption of electric vehicles, even as the industry grapples with remaining challenges and skepticisms from some dealers.
