As the production of new electric vehicles (EVs) increases, demand remains the same—leaving lots of unsold new cars.
- Cox Automotive Senior Manager Jonathan Gregory tells Axios that the automaker industry is waiting for EV buyers to emerge amid efforts to push electrification.
- EV inventories have swelled in recent months as automakers prioritize them, and sales have increased to 6.5% of the total car market, with 51% of customers considering EVs an option.
- This increase in demand is still not meeting supply, with a 350% increase in EV stock.
- The U.S. has a 92-day supply—compared to an average of 54-day stock for gas-powered vehicles. The normal stock would be 70 for both, Axios reports.
- These numbers are not reflected in hybrid sales, with Cox reporting an average 44-day supply of new hybrid vehicles.
Why It’s Important
On August 16, 2022, President Joe Biden signed the Inflation Reduction Act and signed $369 billion in climate change subsidies into law, including tax credits for buyers who purchase domestically-build EVs. The federal government and auto manufacturers are attempting to rapidly phase out emissions-producing vehicles by 2035 to help meet carbon emissions reduction targets.
The rapid expansion of EV production has not been met with enthusiasm from the general public. EVs have several problems that are keeping a mass-adoption scenario out of the immediate future. As we previously reported, the cost of an average new EV is significantly higher than a new gas vehicle and does not generally decrease in value to the point where an average American buyer can afford one.
EVs also have difficulty with long-distance traveling. Many have ranges of several-hundred miles but require long charging times and access to public charging stations. President Biden has attempted to expand the available infrastructure, but most current EV customers are unable to drive outside of a small radius of their home charging stations and find them cumbersome for long-distance trips.
Toyota executives and researchers have been among the most notable public critics of the rapid EV push. Toyota CEO Akio Toyoda spoke pessimistically about the possibility of mass adoption last fall, saying that his company will continue producing hybrids and gas vehicles. Gill Pratt, Toyota’s lead automotive researcher, and scientist, recently warned that the world is transitioning to EVs too quickly.
Cox notes that Toyota EVs have a 101-day supply compared to a 30-day supply of Prius and RAV4 hybrids.