Analysis - slow-selling electric cars are the new pain in the car industry

 DETROIT (Reuters) - The U.S. electric vehicle market is growing, but not fast enough in the latest quarter to prevent backlogs of electric cars at some car dealers or allow Tesla to avoid new price cuts, according to analysts and industry data.

Rising inventories and price cuts could represent only a short-term pause in the growth of the EV market. But they could indicate that increasing U.S. EV sales beyond the current level of 7% market share will be more costly and difficult than expected, even with federal and state subsidies.

North American automakers have billions of dollars in EV-related investments depending on how next quarter plays out. If EV production continues to outpace demand, automakers will have to choose between cutting prices and profit margins or slowing assembly lines.

According to AutoForecast Solutions, more than 90 new EV models are expected to hit the US market by 2026. Many will struggle to achieve profitable sales volumes, analysts said.

According to a Cox Automotive report, dealers of established automakers such as General Motors, Ford, Hyundai and Toyota have more than 90 days of unsold electric cars in their stores at current retail prices.

U.S. dealers have more than 92,000 EVs in stock, more than triple the number on their lines a year ago, according to Cox data. Overall, new vehicle inventories are up 74% from a year ago, Cox said.

The availability of EV models is wide. GM had 50 days' worth of Cadillac Lyriqs on hand as of June 30, which is less than the industry average of 52 days at current sales rates, Cox said.

GM said in a statement that it has “very low inventory – and high demand” for its EVs. More than 80% of the Lyriq and GMC Hummer EVs produced are still on their way to dealers, the automaker said.

GM's bigger challenge was to accelerate production and delivery of its next-generation electric vehicles built on GM's Ultium architecture. Of the 36,024 GM electric vehicles delivered in the United States during the first half of this year, only 2,365 were Ultium EVs. GM aims to produce a total of 100,000 electric vehicles in North America during the second half of this year.

Ford had 86 days of F-150 Lightnings and 113 days of Mustang Mach-E electric SUVs, Cox said.

Ford said Cox's figures overestimate the inventory of both models. Ford is seeing an 83-day inventory of the Mach-E, with more than half of the vehicles produced being shipped to dealerships, said Erich Merkle, head of U.S. sales analysis.

The automotive industry has been experiencing a major shift towards electric vehicles (EVs) in recent years. Due to concerns about climate change and pressure for greener transportation, car manufacturers have invested in electric car technology. However, despite the initial hype and enthusiasm, some EV models face a significant challenge – slow sales. This article looks at the reasons behind the stagnant demand for EVs and its impact on the automotive industry as a whole.

Lack of charging infrastructure

One of the main reasons for the slow sales of electric cars is the lack of charging infrastructure. Although charging stations for electric cars are constantly expanding, they still lag behind the convenience and ubiquity of traditional gas stations. Potential buyers may be hesitant to switch to an EV if they worry about range concerns and the inconvenience of finding a charging point during long trips. The automotive industry must work with governments and other stakeholders to invest in a robust charging network that will strengthen consumer confidence in electric vehicles.

Higher price points

Another factor contributing to slow sales of electric cars is their relatively higher price compared to conventional cars. While the costs of EV technology are falling, they still remain higher than traditional internal combustion (ICE) counterparts. In addition, the cost of batteries, a key component of EVs, remains significant. The price difference makes it difficult for EVs to directly compete with ICE vehicles in terms of affordability, which discourages price-sensitive consumers. To solve this problem, car manufacturers need to focus on innovation, economies of scale and government incentives to reduce the cost of electric cars.

Currently, the range of available EV models is limited compared to ICE vehicles. Consumers have different needs and preferences, and the lack of options in the EV market can deter potential buyers. The automotive industry needs to invest in research and development to offer a wider range of EV models, including SUVs, sedans and pickup trucks. By catering to a broader consumer base, automakers can tap into new market segments and stimulate EV sales.

Range Anxiety and Battery Technology

Range anxiety, the fear of running out of capacity before reaching your destination, remains a major concern for many potential EV buyers. Although EV technology has advanced significantly in achieving longer ranges and shorter charging times, the perception of limited range persists. In addition, the current state of battery technology needs to be improved, including charging speed and lifetime. Investing in research and development to improve battery performance and range will alleviate range concerns and increase consumer confidence in EVs.Marketing and consumer education

Effective marketing strategies and consumer education play a key role in EV adoption. Automakers need to educate consumers about the benefits of EVs, including lower emissions, lower fuel costs and potential incentives. Promoting the convenience of home charging, long-term cost savings and the positive environmental impact of EVs will help dispel misconceptions and create a positive image of EVs in the minds of consumers.

As the transition to electric vehicles gathers momentum, slow sales of EVs present a new challenge for the auto industry. A lack of charging infrastructure, higher prices, limited model offerings, range concerns and the need for better marketing and consumer education all contribute to the slower adoption of EVs. Addressing these challenges requires cooperation between car manufacturers, governments and other stakeholders to invest in charging infrastructure, reduce costs, expand model lines, improve battery technology and effectively educate consumers. Only by overcoming these obstacles can the automotive industry lead to the widespread adoption of electric cars and achieve a greener future for transportation.

The automotive industry is undergoing a significant shift towards electric vehicles (EVs) due to their environmental benefits and increasing government regulation favoring cleaner transportation. But despite the growing interest in EVs, a troubling trend has emerged: slow-selling EVs. This article will delve into the reasons for slow EV sales and discuss the impact this is having on the automotive industry. Lack of infrastructure

One of the main challenges preventing the widespread adoption of electric cars is the lack of charging infrastructure. Range anxiety remains a major concern for potential EV buyers who worry about the availability and accessibility of charging stations. Limited charging options make long-distance travel inconvenient and the fear of running out of power is a deterrent for many consumers. Solving this problem by expanding the charging network would be a crucial step to increase EV sales.

High initial costs

Although long-term savings from lower fuel and maintenance costs make electric cars an attractive option, the initial purchase price is often higher compared to conventional gasoline-powered vehicles. Adding to the price disparity are the costs of advanced battery technology and other EV-specific components. Affordability remains an obstacle, especially for budget-conscious buyers. Manufacturers must focus on reducing the initial cost of electric cars to make them more affordable for a wider range of consumers.

Limited model options

In the early stages of the EV market, available model options were limited, often focusing on compact or mid-sized vehicles. While these models appealed to environmentally minded urban dwellers, they failed to satisfy a wider range of consumer preferences such as larger SUVs or pickup trucks. Expanding the EV lineup to include more diverse options would attract a wider customer base and help boost sales.

EV technology has made significant progress in recent years, but concerns about range and charging time remain. Consumers are still concerned about the limited range of EVs compared to their gasoline counterparts. In addition, the time required to fully recharge remains longer than a traditional refueling stop. Improvements in battery technology to increase range and shorten charging times will alleviate these concerns and boost consumer confidence in EVs.

Many potential buyers of electric cars lack sufficient knowledge about the benefits and possibilities of electric cars. Misconceptions about EVs, such as concerns about battery life, charging processes and performance, cause hesitation among consumers. Car manufacturers, in cooperation with government agencies, must prioritize informing consumers about the benefits of electric vehicles and dispel any misconceptions to encourage wider adoption.

While the transition to electric vehicles represents a promising future for the automotive industry, slow sales of electric vehicles present a new challenge. Addressing issues related to charging infrastructure, high initial costs, limited model options, range concerns and consumer education will be critical to overcoming this hurdle. With the joint efforts of car manufacturers, governments and other stakeholders, the industry can work to solve these problems and accelerate the adoption of electric cars on a larger scale.