FYI: The market is experiencing a surplus of new electric vehicles (EVs) leading to significant deals, despite sustained demand.
### Surplus of Electric Vehicles Leading to Market Deals
The landscape for electric vehicles has seen a dramatic shift recently. The supply of new EVs now largely outpaces the availability of used ones, maintaining a 3 to 1 ratio. Prospective buyers predominantly search for new EV models from Kia, Ford, and Chevrolet. However, when it comes to used EVs, Tesla reigns supreme in search popularity.
### Opportunity for Bargain Hunters
If you’re hunting for a deal, you’re not dreaming – there are remarkable bargains available for both new and used EVs. While this is a windfall for those on a budget, it spells trouble for automakers who are looking to balance supply with demand. This disparity largely contributes to the slumping prices in the market, which, although favorable for buyers, isn’t ideal for the industry.
### Insights from Cars.com
Cars.com offers some perspective on the current market dynamics. While electric vehicles are not becoming obsolete, there is a glaring imbalance between supply and demand. Demand for new EVs has inched up by 4.4% compared to the previous year. However, EV inventories have surged by over 60%, with vehicles now sitting on lots for an average of 82 days – about 20% longer than last year.
### Market for Used EVs
The market for used EVs is also experiencing significant growth. Although the prices for used EVs have dropped by an average of 7.8% since last year, their popularity among buyers is rising. Notably, searches for used EVs are five times higher than those for new models. The plummeting resale values of vehicles like the Tesla Model 3 are playing a major role in this trend, making them more accessible to a wider audience.
### Popular Models and Market Trends
New EV buyers still show substantial interest in models from Kia, Ford, and Chevrolet – the Kia EV9 and Chevy Blazer EV being notable examples. These vehicles often feature compelling lease and purchase deals, with monthly payments competitive with those of used EVs. Even in states without incentives, such as Ohio, models like the Hyundai Ioniq 5, Ioniq 6, and Kia Niro EV can be leased for under $200 a month – a remarkable offer.
The fastest-selling EVs in today’s market include the Toyota BZ4X and Subaru Solterra, ranking third and fifth respectively. Despite these models not being the top tier, dealer incentives have significantly boosted their attractiveness to buyers.
### Future Outlook for Automakers
These current pricing trends, characterized by increased EV supplies and low pricing, are not sustainable in the long run. Many automakers are re-evaluating their strategies to manage production better, aiming to restore a balance reminiscent of the pandemic era when demand outstripped supply across all vehicle categories.
While a return to that level of demand might be unlikely, it is crucial for automakers to adapt without sacrificing the affordability of EVs for consumers.
For more insights and updates, reach out to us at tips@automotive.fyi, or on Twitter @automotivefyi.
—
William Kouch, Editor of Automotive.fyi
