EV sales are up, but U.S. automakers — and drivers — are still cautious
Overstocks mean car shoppers are taking advantage of deals and a good selection, but that may change as automakers slow down production.
In recent months, automakers have pledged to walk back electric vehicle production targets, delayed and canceled the rollout of new EV models, and shifted their focus from fully electric to more hybrid vehicles.
But sales of electric vehicles are growing at a pretty fast clip, up 11% domestically in the third quarter, according to the latest count from Kelley Blue Book. And global sales increased by a third in September, mostly thanks to China, according to the intelligence firm Rho Motion.
A few years ago, the U.S. auto industry set aggressive production goals for electric vehicles. Jessica Caldwell, head of insights with Edmunds, said consumer demand didn’t quite pan out.
“Automakers were a bit overenthusiastic about them,” Caldwell said.
That means dealerships are now somewhat overstocked with EVs. And, said Stephanie Valdez Streaty with Cox Automotive, they’re marking them down.
“Incentives are definitely helping to fuel sales,” she said.
Those include government tax credits and steeper dealership discounts than you find on gas cars. Plus, shoppers are finding more electric options on the lot.
“If you need a full-sized-SUV, the [Kia] EV9 supports that, or Rivian. Or you want a smaller, more compact vehicle, whether it’s [the Ford Mustang] Mach-E or the [Honda] Prologue,” she said.
But those deals and expanding inventory won’t last forever, said Caldwell with Edmunds.
“So if we have this conversation in a year or two years, that may not be the case because automakers have scaled back production,” she said.
American automakers, anyway.
While China races to dominate the market, with help from generous subsidies from its government, and Europe tries to catch up, U.S. consumers still have cold feet, said Stephanie Brinley with S&P Global Mobility.
“You really have to get these people that are kind of interested but not sure and super practical to make a leap,” she said.
Brinley said EV infrastructure here has improved and vehicle range is expanding. But consumer anxiety on those fronts is tough to crack.
“Especially because the other half of the conversation tends to be, ‘It’s gonna be better in a little bit,'” she said.
Which is enough to keep a lot of people in their gas cars.