EV inventory reaches critical mass in U.S., Cox says

DETROIT — Electric vehicles have reached a critical mass, outpacing average days' supply of gasoline vehicles at dealerships, according to Cox Automotive, but some dealers still need convincing.

EVs are no longer exclusive to the new-vehicle market, said chief economist Jonathan Smoke. EV emergence in the used and wholesale market gives them more staying power, he said.

"Up until now, this has been a Tesla, Nissan, GM story and a little bit of Volkswagen," he told Automotive News. "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."

EV production growth is outpacing sales, Cox said. EVs made up 7 percent of new-vehicle sales in the first quarter, Cox said, with affordability as consumers' primary purchase barrier.

Dealers' average EV supply climbed to 92 days in the second quarter, up from 36 days a year earlier. EV inventory soared to more than 92,000 industrywide, compared with less than 21,000 in the second quarter of 2022. New-vehicle supply industrywide was 51 days. Days' supply — or the average number of days a vehicle will stay in dealers' inventory before selling — can include vehicles in progress, in transit and on dealers' lots, Cox said.

Still, less than a third of the 152 dealers surveyed by Cox say they think EVs are the future and will largely replace gasoline vehicles over time. About half of those dealers feel that EVs need time to prove themselves in the market.

That stance clashes with their customers.

More than half of the 1,024 consumers surveyed by Cox feel that EVs are the future. More than half of consumers said they will consider an EV purchase in the next 12 months, compared with 38 percent in Cox's survey a year earlier. They're drawn by fuel savings, environmental impact, performance, maintenance efficiency and lower cost of ownership, Cox found.

Top EV purchase barriers include high vehicle price, lack of public charging stations and concerns over the cost of battery replacement.

Despite some dealers' EV skepticism, most dealers consider EV sales and service as important drivers of business growth. More than 80 percent of dealers surveyed are required by their automaker to make an EV investment. About half said they feel extremely prepared to sell and service EVs. More than 40 percent felt neutral, and a small percentage felt unprepared.

Dealers said they need more fast-charging infrastructure, EV technicians, along with EV service training, tools and parts.