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Used EV prices plunge, unsold new EVs languish on lots

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Are EV deniers right? Is the world just not ready for the EV-olution? Though the federal government is supporting an electric-vehicle future and several automakers have made pledges to go all-electric by such-and-such date, the general public doesn’t seem to be buying it. Literally. Recent reports from iSeeCars.com and Axios tell an interesting story of plunging EV prices and unsold cars piling up on dealer lots.

What in the heck is going on?

EV curious ≠ EV buyer

According to the Axios report, 51% of consumers are now considering a new or used EV, but there is still a glut of new EVs for sale. In fact, only about 6.5% of the U.S. sales currently go to EVs.

So, while the interest is there, people are still hesitant to throw some skin in the game – and a lot of that is likely due to range anxiety and the lagging charging infrastructure.

When you have states like Wyoming, South Dakota, North Dakota and Minnesota that have a decided lack of any public charging options and other states like Illinois or Indiana that can go 160 miles or more between charging stations on the interstate, well, it gets harder for someone who’s EV curious to justify the purchase.

Even if 99% of their driving would be covered by at-home charging, there’s always that 1% chance – and fear – that they’ll need more range than they have access to.

33 new EV models in 2023

As incentives rise and more companies commit to an EV future, there are more electric options than ever. Remember when you could essentially choose between a Tesla Model S and a Nissan Leaf? Now you have EVs of all shapes and sizes from all of the major automakers. There are 33 new EV models in 2023 and 50 new or updated EVs coming in 2024.

As Axios points out, the nationwide EV supply has risen nearly 350% to more than 92k units.

Thus, there’s a 92-day supply of EVs vs. a 54-day supply of gas vehicles.

“The return of EV supply has exceeded demand in many cases,” said Ed Kim, president and chief analyst for AutoPacific. “Right now, the market is finally at that inflection point where EVs are starting to appeal beyond the early adopters that have made up the bulk of EV customers over the last 12 or so years, and automakers are doing everything in their power to expand the relevance of EVs to the mainstream. In fact, because so many automakers have bet the farm on going all-electric over the coming years, it is imperative that they succeed in getting the mainstream buyer on board. Right now, the return of strong EV inventories has exceeded the pace of growing mainstream consumer interest, and that is a primary factor behind growing EV inventories.”

Supply & demand

A lot of the current EV are from luxury automakers, or they’re assembled on foreign soil – and both of those situations disqualify them from federal tax incentives. So, an already expensive vehicle essential gets more expensive, and thus makes consumers less inclined to buy them.

Therefore, some of the most bloated inventories come from luxury automakers like Audi or GMC or foreign ones like Kia, Hyundai and Nissan.

OK, but what about used EV prices? Those prices are plummeting, and as iSeeCars.com analyst Karl Brauer points out: This reflects “a clear shift in EV supply and demand.”

With Tesla cutting prices on new models, this affects the used car prices as well.

“Right now, consumers are really incentivized to get new EVs because not only are their MSRPs being slashed, but since the Inflation Reduction Act (IRA) rules were finalized a few months ago, there is no longer any ambiguity about federal tax credits and new EV buyers and lessees alike are taking full advantage of them,” Kim said. “All this has put major downward price pressure on used EVs.”

Plus, with gas prices stabilizing, there’s no urgency to buying electric right now.

The bottom line

No, I don’t think the EV deniers are right. We’re going through a period of adjustment where people suddenly have choice and time to make a purchase. The supply chain is finally starting to even out post-Covid, gas prices are stable, and Tesla is no longer the only game in town.

As Kim points out: “There is likely to be a lot of ebb and flow in the coming years as mainstream EV adoption grows and automakers measure and adjust production against demand in real time. The growing inventories are not necessarily a concern for EV adoption yet, but they do illustrate that onboarding mainstream consumers into EVs may be a road full of curves, rises and dips.”

So, go home, Chicken Little. The EV sky is not falling.

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Jill Ciminillo

Jill Ciminillo is the Managing Editor for Pickup Truck + SUV Talk as well as a Chicago-based automotive writer, YouTube personality and podcast host, with her articles and videos appearing in outlets throughout the U.S. Additionally, she co-hosts a weekly radio show on car stuff for a local Chicago station. Previously, Jill has been the automotive editor for both newspaper and broadcast media conglomerates. She is also a past president for the Midwest Automotive Media Association and has the distinction of being the first female president for that organization. Jill is also currently a juror for the North American Car, Utility and Truck of the Year (NACTOY).

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1 Comment

  1. bob July 12, 2023

    Not to worry. The Govt. will force people into EV’s, in the end the Govt. always wins. When gas vehicles become 2 times more expensive to own, people will move over. The ol pocketbook and wallet affects everything and everybody and every business.


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