Pirate's Cove

For pretty much about every other type of vehicle there’s a lack of vehicles. Inventory is tight. This should probably start getting better within 4-6 months. EVs?

EVs are running out of customers — and some dealers don’t want them anymore

More electric vehicles are being pumped out of car factories than ever before — but some dealers don’t want them.

Electric-car inventory has been piling up on dealership lots this year as companies up their EV production, leading some dealers to say enough is enough. Some are telling automakers they don’t want any more until they can sell what’s sitting, several dealers told Insider.

“We have turned away EV inventory,” said Scott Kunes, the chief operating officer of Kunes Auto and RV Group, which sells Detroit brands as well as Nissan and Mitsubishi in the Midwest. “We need to ensure that we have a good turn on it.”

Automakers are “asking us to make a large investment,” Kunes added, “and we’re just wanting to see some return on that investment.”

There are only so many people who are willing to purchase an EV, and only so many people who can afford to do so. Further, there are many who would purchase one, but, they are too inconvenient for their lives.

Plug-in-vehicle availability is increasing rapidly, a sign the EV-adoption growth curve is about to hit a serious slowdown. A switch from enthusiastic and wealthy early adopters to more apprehensive and budget-minded car shoppers is throwing the electric-car transition for a loop, forcing car companies to change their outlooks and pull back on ambitious EV production goals.

“It’s not just that these vehicles are expensive — which they are. We’re talking about a much more nuanced lifestyle change,” said Sam Fiorani, the vice president of global vehicle forecasting at AutoForecast Solutions. He pointed to differences in the EV ownership experience, including charging and range anxiety, as stoppers for many buyers.

“It’s hard for the average customer to make that leap while spending an extra $10,000,” Fiorani said.

The majority of EV buyers make between $150K-$300K a year with a smattering of very rich folks who have them as a second vehicle. The average cost of an EV is $64K. If you can buy a Corolla or Civic, nicely appointed, for under $30k, or a Camry or Accord for under $35K, why would you go for an EV about the same size for so much more?

Car shoppers can find plenty of electric options on dealership lots — while there was about 54 days’ supply of vehicle inventory overall at dealerships earlier this summer, EV inventory was nearly double that.

54 days? Where? I can think of a few individual models which had an abundance, but, that has stopped. Most are gone in 6 days to 2 weeks.

But the savviest executives will heed this first warning from dealers about where the demand pendulum is swinging, Karl Brauer, an automotive analyst for iSeeCars, previously told Insider.

“Dealers know in real time with real-time feedback what the market is doing,” he said. “They have always acted as the first warning lights on the dash for the automotive industry.”

They got the early adopters, and will continue to sell some, around 3-6% of sales, but, when talking the non-luxury lines (Honda, Toyota, VW, Ford, Kia, etc), most aren’t interested. Few ask. Most who do ask aren’t interested in purchasing, just more of wondering.

(Watts Up With That?) But that’s still better than the news reported in March that insurance companies are having to write off EVs with just a few miles – leading to higher premiums – because of the many EVs for which there is no way to repair or assess even slightly damaged battery packs after accidents. EV battery packs are ending up in junkyards in multiple countries.

According to the Agent Support Network of America, the intense impact of a crash can be much more devastating to EVs, increasing the likelihood of a totaled versus repairable car. EVs, according to Consumer Reports, may not withstand an accident as well as traditional gasoline-powered vehicles. EV batteries are vulnerable to damage, and with any indication of a compromised battery, insurance companies will likely declare an EV crash a total loss.

So, add insurance costs to the picture, where people will pay around 25% more at this time, on top of already higher premiums post-COVID. And as more are on the road that cost could go up.

Read: EV Sellers Running Out Of Buyers »