EV stockpile is evidence of growing pain, not demand dip, experts say

Days’ supply tallies vary by model. For example, Cox’s averages by model ranged from 23 days, for the Chevrolet Bolt EUV, to 181 days for the Nissan Ariya. Most EV models had more than 100 days’ supply, Cox said.

GM spokesman Jim Cain said the typical days’ supply calculation looks backward and can obscure what’s really going on in the market for a specific vehicle. For example, to calculate the days’ supply at the start of August, July’s month-end inventory would be divided by July’s sales, then multiplied by the number of selling days in July. J.D. Power’s calculation is slightly different, always multiplying by 30 days, rather than the number of selling days in a given month.

“If you have low sales, which is common for vehicles that are launching, and rising inventory, which is also expected for launch vehicles, you get a high days’ supply number,” Cain said. “The reading can be further misleading if a significant amount of that inventory is in transit to dealers and not available for sale.”

Days’ supply figures tell the inventory story best when the product is in a steady state, said Chris Harto, senior policy analyst at Consumer Reports. With EVs, some automakers are shutting down plants and struggling with production hiccups, while others have increased U.S. production beyond the level of demand.

“There are some issues … driving really significant conclusions from one point in time,” Harto said.

Dealers have grown accustomed to having no EVs — and very few gasoline vehicles — as the coronavirus pandemic and microchip shortage hampered production. Many of the EVs they’ve sold were preordered or reserved by customers before reaching their showrooms.

Still, having EVs on the lot, even in single digits, can be a shock and an inventory financing expense for dealers who are located in states or cities where there’s less consumer enthusiasm for the technology.

The early, eager EV buyers are already driving their cars. Now dealers have to sell EVs to mainstream consumers. And they face tough competition against a price-slashing Tesla.

Dealers in EV-friendly states, such as California, are seeing the next phase of consumers. These shoppers are intrigued by EVs but have questions before they commit to buying one, said Mike Sullivan, owner of LACarGuy family of dealerships.

He expects battery-electric vehicles to make up 10 to 12 percent of sales at his 14 dealerships, which represent eight brands in Los Angeles. Hybrid and hydrogen-powered vehicles will make up another 40 to 50 percent.

Sullivan is investing millions in new EV-specific showrooms and chargers in California, where electric cars made up 21 percent of new vehicle registrations in the first half of this year.

EV sales, however, won’t be even across the country, Sullivan said.

“There was already telltale data where Tesla was selling cars,” he said. “It’s going to spread slowly. Montana doesn’t want them.”

In Amarillo, Texas, several ID4 EVs linger on Street Volkswagen’s lot. It takes the store 100 days to sell an ID4 on average, said dealer John Luciano.

“The early adopters are gone. They bought it,” he said.

Luciano was enthusiastic about selling EVs quickly and said he loves the ID4. “I hoped and prayed I’d sell 40 a month. It’s another tool in your tool bank,” he said. “In our market, it hasn’t come to that.”

In Fort Worth, the electric Ford F-150 Lightning has gone from “hot to not,” said Stephen Gilchrist, dealer operator for an 18-store group in the region. He’s found it a tough sell once he worked through a flurry of initial orders. Consumers in Texas mostly want gasoline-powered trucks, he said.

“We are in the infancy of this EV era. You’re going to have some stops and starts as you gain higher adoption rates,” Gilchrist said. “A lot of people are starting to realize the idea that we are all going to drive EVs by 2030 is not accurate.”

Whether the rate is at 40 percent, 50 percent or 70 percent, EV sales are growing nationwide, Harto said.

The question is a matter of when EVs will become mainstream, Sullivan said.

“I have no question of where we’re going,” Sullivan said. “It’s just the pace of when we get there.”