More dealers are saying they have to turn away electric vehicles as demand cools.
Without early adopters, EVs are a tougher sell.
As EV growth cools, dealers are the ones left in the lurch.
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."
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.
EVs have gone from shortages to near oversupply
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.
That's an about-face from the past several years, when it has often been difficult to even find an EV to test-drive, let alone take home and buy.
All of those challenges created a lot of hype and an apparent supply-and-demand crunch. While the overall share of EVs in the US market is low — about 6% — it has grown rapidly in the past few years as hype for these vehicles heightened and brands such as Tesla made electric cars a status symbol.
Today, EV inventory isn't the problem. Automakers are shoring up their factories to churn more of these cars out. But demand isn't growing at the same pace.
Even with record EV sales month after month, sales are plateauing as automakers try to target buyers beyond the early adopters.
As a result, one East Coast Ford dealer previously told Insider they were only declining allocation of electric cars from the automaker. Another in the Midwest said Lightning orders were piling up uncompleted, leaving those customers with time to pick a different EV. One Hyundai dealer on the West Coast said they were also passing on EV-specific allocation, while another Hyundai dealer told Insider he anticipated having to turn away EVs soon.
Adam Lee, the chairman of the board at Lee Auto Malls in Maine, said he was still taking all the EVs he could get, but his electric Toyotas were the slowest to sell.
"The only Toyotas I have that aren't presold are the electric ones, the bZ4X, and that's a little bit of a challenge," Lee said.
In the EV plateau, dealers are left in the lurch
In this round of growing pains for the electric-car market, dealers are set up for the most trouble. Car companies are likely to continue churning out the EVs they promised to investors, leaving dealers to figure out how to sell them to a new set of customers.
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."
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