The Current EV Supply Dilemma
Despite a surge in electric vehicle (EV) models and the growing hype surrounding them, dealerships are grappling with unprecedented inventories of EVs, with some facing up to four months’ worth of stock. This paradox arises even as Tesla continues to drive significant EV sales, while many new and traditional automakers struggle to attract buyers. Data from the first half of 2023 shows that while Tesla leads in sales, other brands like Lucid, Hyundai, and Nissan have not seen similar success, leaving many EVs languishing on dealership lots.
The Impact of Excess Inventory and Rising Affordability
The current EV market sees a 350% year-over-year increase in supply, translating to a 92-day inventory surplus compared to the ideal 45-day level. Factors such as the loss of U.S. tax credits for certain models and the higher price point of EVs contribute to this glut. However, this oversupply could benefit potential buyers, offering more room for negotiation and the possibility of better deals, especially as used EVs become more prevalent and range anxiety continues to diminish.