DETROIT, July 11 (Reuters) – The U.S. electric vehicle market is growing, but not fast enough during the latest quarter to prevent unsold EVs from stacking up at some automakers’ dealerships or to allow Tesla to avoid new price cuts, according to analysts and industry data.
Rising inventories and price-cutting could represent only a short-term pause in EV market growth. But they could be signals that boosting U.S. EV sales above the current 7% market share level will be more costly and difficult than expected, even with federal and state subsidies.
Automakers North America have billions of dollars in EV-related investments riding on how the next several quarters play out. If production of EVs continues to outpace demand, automakers will have to choose between slashing prices and profit margins, or slowing assembly lines.
More than 90 new EV models are expected to hit the U.S. market through 2026, according to AutoForecast Solutions. Many will struggle to reach profitable sales volumes, analysts said.
Dealers for established automakers such as General Motors (GM.N), Ford (F.N), Hyundai (005380.KS) and Toyota (7203.T) have more than 90 days’ worth of unsold EVs at their stores at current sales rates, according to a report from Cox Automotive.
U.S. dealers have more than 92,000 EVs in stock, more than three times the number on their lots a year ago, according to Cox data. Overall, new vehicle inventories are up 74% from a year ago, Cox said.
There is a wide range in the availability of EV models. GM had 50 days’ worth of Cadillac Lyriqs available as of June 30, below the industry average of 52 days’ supply 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 Lyriqs and GMC Hummer EVs built are still in transit to dealers, the automaker said.
GM’s bigger challenge has been accelerating production and delivery of its next-generation EVs built on GM’s Ultium architecture. Of 36,024 EVs GM delivered in the United States during the first half of this year, only 2,365 were Ultium EVs. GM has a goal of building a total of 100,000 electric vehicles in North America during the second half of this year.
Ford had 86 days worth of F-150 Lightnings and 113 days’ worth of Mustang Mach-E electric SUVs on hand, Cox said.
Ford said Cox’s figures overstate the inventories for both models. Ford sees Mach-E inventories at 83 days’ supply, with more than half of the vehicles produced in transit to dealerships, said Erich Merkle, head of U.S. sales analysis.
Ford sees Lightning inventories at 58 days’ supply including vehicles in transit. The Dearborn, Michigan, factory that assembles the electric pickups is shut down this month for retooling.
“By no means are those inventories high,” Merkle said.
Ford is increasing capacity for both the Mach-E and Lightning to levels well above current sales.
Ford built 46,238 Mach-Es during the first half of this year, and sold 14,040 of the electric SUVs,…
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