The Rise of Electric Vehicles: Supply Meets Demand

In recent years, the demand for electric vehicles (EVs) has been steadily increasing. Now, it seems that the supply of EVs has finally caught up with this demand. According to research from Cox Automotive, America’s dealerships now have a relatively greater supply of electric vehicles than gas-powered vehicles.

The average inventory supply of electric vehicles has grown to 92 days in the second quarter of 2023, up from just 36 days a year ago. This is a significant increase and indicates that dealerships are stocking more EVs to meet the rising demand. In comparison, the industry-wide new vehicle supply was 51 days in the most recent quarter.

The days’ supply metric is an industry measurement that calculates how long a vehicle will stay in a dealer’s inventory before being sold. It takes into account vehicles in progress, in transit, and more, not just those sitting on dealers’ lots. Cox Automotive explained that the higher days’ supply for EVs suggests that they are staying in inventory longer but are still gaining market share.

In fact, the numbers show that EV sales are accelerating faster than internal combustion engine (ICE) vehicles. In the first quarter of 2023, electric vehicles accounted for seven percent of new car sales. This indicates that consumers are increasingly opting for EVs over traditional gasoline-powered cars.

One possible reason for EVs spending more time on dealership lots is that the technology is no longer as new. With used EVs now entering the market, these vehicles have greater staying power. This is good news for consumers who are considering purchasing an EV in the near future. According to a survey, more than half of respondents said they would consider buying an EV within the next 12 months. The lower maintenance costs, reduced ownership expenses, and environmental benefits are all factors that attract buyers to EVs. However, the high manufacturer’s suggested retail prices (MSRPs) of most EVs remain a barrier for many potential buyers.

While consumers are increasingly interested in EVs, dealerships have mixed opinions about their future. Cox Automotive surveyed 152 dealers and found that less than 33 percent believed that EVs were the future. Half of the dealers felt that EVs still need time to prove themselves in the market. However, regardless of their beliefs, 80 percent of dealers will be compelled by automakers to invest in electrification.

The push for electrification comes as governments and automakers worldwide aim to reduce carbon emissions and combat climate change. Many countries have set ambitious targets to transition to electric vehicles, and automakers are investing heavily in EV production. This investment will likely lead to more EV models, increased supply, and potentially lower prices, making EVs more accessible to a wider range of consumers.

As the supply of electric vehicles continues to increase, it is expected that their market share will also grow. With advancements in technology and infrastructure, EVs are becoming a more viable option for consumers. The longer stay of EVs in dealer inventory may be a temporary phase as the market adjusts to the increasing demand. In the coming years, it is likely that EVs will become even more prevalent on our roads, contributing to a greener and more sustainable transportation future.

In conclusion, the supply of electric vehicles has finally caught up with demand in the United States. Dealerships now have a greater supply of EVs compared to gas-powered vehicles. Despite spending more time on dealership lots, EV sales are accelerating faster than ICE vehicles, indicating that they are gaining market share. The availability of used EVs and consumer interest in lower maintenance costs and environmental benefits contribute to their increasing popularity. While dealerships may have reservations about the future of EVs, they will be compelled by automakers to invest in electrification. As governments and automakers focus on reducing carbon emissions, the rise of electric vehicles is inevitable.