- Auto dealers are sitting on way more electric cars than they are gas-powered ones.
- Cox Automotive said in June that new EV inventory is having a "field of dreams" moment.
- Having more inventory means more test drive opportunities and better deals.
By one key measure, there are nearly double the amount of EVs compared to gas cars at dealerships right now — and that could help solve two of today's biggest problems with car shopping.
New car inventory on dealer lots is sitting at about a 54 days' supply, according to Cox Automotive. But for electric vehicles, that number is almost two times as much, with 92.2 days' supply at dealerships — up 343% from a year ago.
That's good news for buyers hoping to test drive an EV before buying, something that hasn't always been easy amid supply shortages in recent years. It's also likely to help prices keep going even lower as inventory stacks up.
"I called it the 'field of dreams' moment in terms of new EV inventory and supply," Jeremy Robb, senior director of economic and industry insights, said during a Cox mid-year review. EV sales are up this year, but "are not going up to the same extent that inventory is going up.
"The jury is out right now on what's going to happen with all this new inventory there," he added. But it could solve a few big hurdles.
One of the issues with EV adoption in recent years has been availability. Many automakers weren't producing EVs at scale yet, especially in the US, and thus the supply of the cars at dealerships had been limited. They also had reservation systems and long waitlists that meant it was unlikely a customer would be able to walk into a store and find an EV for purchase.
That was a turnoff for many consumers considering going electric, and led some to just buy a gas-powered vehicle that they could see and go home with that day.
Now, car companies are ramping up EV production, bolstering their manufacturing and supply chains, and churning out more electric cars. In fact, some electric models have more availability than others now.
The sudden influx in EVs on lots could help reduce frustration with not being able to find an EV in-store. The fact that there are likely more to test drive or even just take a look at could make a huge difference in adoption, too.
More EVs on the lots might mean more deals are yet to come
But Cox Automotive said the contrast between new EV inventory and new car inventory overall could also impact pricing later in the year.
Consumers have already seen new EV prices creep down over the past several months. In the second quarter last year, a new EV cost $65,560 on average, according to Cox. Now, they're closer to $55,436 — a substantial drop though generally, still costly.
Part of the decrease is related to the ongoing pricing war and EVs getting less expensive as automakers build more and more.
Pricing could take a greater fall if inventory continues to stack up on dealer lots.
The industry got used to charging high prices for little inventory throughout the pandemic supply-and-demand crunch. As that eases and more cars sit at dealerships (a result of production recovering from parts constraints, combined with high interest rates softening buying demand), automakers and dealers are having to offer deals and incentives just to clear inventory.
The same could be especially true for EVs at some point, especially as consumers stay price-sensitive amid the broader economic environment.
After all, one of the least expensive EVs, the Bolt, has been canceled. Even with optimism over reinvented EV tax credits, automakers are having to get creative with cuts. Hyundai just dropped its Ioniq 6 (one of the lower-end EVs available) by $5,000.
Correction: August 16, 2023 — An earlier version of this story imprecisely described June dealership figures. Auto dealerships in June had nearly double the supply of electric vehicles compared with gas vehicles as defined by days of supply, not by the total number of vehicles available.