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US Dealerships Face Slowdown in Electric Vehicle Sales Despite Consumer Optimism

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Mazhar Abbas
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US Dealerships Face Slowdown in Electric Vehicle Sales Despite Consumer Optimism

While consumers invested nearly $400 billion on electric vehicles (EVs) worldwide in 2022, car dealerships across the United States have reported a slowdown in EV sales. Despite the push for a green future and the projection of adding 1 million new EVs to U.S. roads this year, dealerships are grappling with an accumulation of unsold inventory. The supply of EVs at dealerships spiked to 111 days in early July, from an approximate 52 days' supply at the start of the year, before finally settling at 97 days in October. This contrasts starkly with the steady supply of internal combustion engine (ICE) vehicles. In a twist of irony, it took twice as long to sell an EV in August 2023 compared to January.

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Dealerships Struggle Amidst High Prices and Infrastructure Concerns

Despite over half of consumers seeing EVs as the future and anticipating them to replace ICE vehicles, less than a third of dealers share this optimism. Various factors contribute to this, including high pricing, concerns over charging infrastructure, and limitations on subsidies. This is reflected in the actions of EV giant Tesla, which significantly reduced its prices, and Lucid, another electric vehicle company, which experienced disappointing sales. In response to the leveling demand for EVs, Ford Motor has increased hybrid production.

Industry Pushback and Public Concerns

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Car dealer owners, including Balise Auto Group, are urging the Biden administration to reconsider its plan to boost EV sales by cracking down on greenhouse gas emissions from fossil-fueled cars. These dealers argue that consumers are not prepared for the transition and that the rush to electrify the US auto fleet has landed dealers in a challenging position. Jeff Aiosa, owner of Mercedes-Benz of New London in Connecticut, highlights the public's concern over charging infrastructure, particularly for long trips.

Differing Opinions on Transition to Carbon-Free Vehicles

The Alliance for Automotive Innovation and the Green Energy Consumers Alliance hold contrasting views on the urgency of transitioning to carbon-free vehicles. While some see the transition as inevitable, others, such as the CEO of Stellantis, Carlos Tavares, stress the need for cost efficiency to reap good profits on EVs. Tavares also notes the potential impact of policy changes and the outcomes of the 2024 elections on EV demand and adoption.

Despite the current challenges, many industry insiders believe that the long-term transition to EVs is inevitable. The key, they suggest, is not only in improving the technology and infrastructure but also in educating consumers about the benefits and value of electric vehicles.

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