A recent survey conducted by the Sierra Club, titled “Rev Up Electric Vehicles: A Nationwide Study of the Electric Vehicle Shopping Experience,” has revealed that electric vehicle demand is cooling down and a significant number of U.S. auto dealerships are showing a lack of enthusiasm for selling all-electric vehicles (EVs). This study aimed to shed light on the evolving EV market and how dealerships are adapting to these changing times.
Electric Vehicle Demand Cools Down
According to Carbuzz, a staggering 66% of surveyed dealerships currently have no electric vehicles in stock. Even more concerning is that 45% of these dealerships have expressed their unwillingness to offer EVs, even if they were available in their inventory.
The question that arises is, why are so many dealerships seemingly disinterested in embracing the electric future of automobiles and why is electric vehicle demand cool down?
One key factor contributing to this cooling down of the electric vehicle demand is the ongoing challenge of supply chain constraints and technical issues that automakers are facing. These hurdles have made it difficult for manufacturers to promptly deliver their latest EV models to dealerships, leaving many without the inventory necessary to meet potential customer demand.
Another noteworthy trend is the changing nature of the EV consumer base. Electric vehicles initially gained traction among enthusiastic and financially comfortable early adopters. However, as the market matures, it has become apparent that mainstream consumers are now more hesitant and budget-conscious contributing to the cooling down of the electric vehicle demand.
Challenges of the Cooling Down Electric Vehicle Demand
Sam Fiorani, Vice President of Global Vehicle Forecasting at AutoForecast Solutions, highlights this shift and the cooling down of electric vehicle demand stating, “It’s not just that these vehicles are expensive – which they are. We’re talking about a much more nuanced lifestyle change.”
He emphasizes the challenges faced by the average consumer when considering the added cost of electric vehicles.
According to Business Insider, The situation has reversed from previous years when EVs were in high demand but in short supply. In the past, prospective buyers often had to wait for extended periods to even test drive an electric vehicle, let alone purchase one.
With increased production from automakers, EV inventory has now surged, creating an oversupply situation in some cases.
However, despite record-breaking monthly EV sales, the overall growth rate is plateauing. Automakers are now focusing on attracting mainstream consumers rather than catering exclusively to early adopters. This shift in demand dynamics has left some dealerships in a dilemma, with some even declining allocation of electric cars from manufacturers.