Unsold electric vehicles piling up on dealer lots

Axios reports a rising number of unsold electric vehicles (EVs) are piling up on auto dealer lots throughout the nation as the supply of the vehicles begins to outstrip demand.

The supply of EVs has increased in part due to rising consumer demand and states adopting California’s regulations requiring automakers to stock so-called Zero Emissions Vehicles (ZEVs) in their states.

Cox Forecasting expects EV sales to reach 1 million units for the first time this year, but the nationwide supply of EVs in stock has swelled nearly 350 percent this year to more than 92,000 units. This is the equivalent of 92 days’ worth of supply, roughly double the industry standard.

Minnesota is among the 16 states that will require auto dealers to stock EVs in their state. According to estimates from the Minnesota Pollution Control Agency, car manufacturers will be required to stock 14,000 EVs in the state in 2024.

Unfortunately, Axios did not supply state-level inventories of EVs, which would allow us to see if states with EV mandates had higher rates of unsold EVs than states without them. However, supporters of the California car rules argued that they would increase the supply of EVs available in the states that adopt them.

Consumers seem more apt to spring for a hybrid vehicle than a fully-electric vehicle. This makes sense; it allows people to electrify part of their trips while alleviating concerns about range anxiety. Toyota also argues that hybrids are more environmentally friendly because they have smaller batteries, which allows them to build more vehicles for the same amount of battery resources.

Instead of forcing unwanted EVs onto consumers, state and federal regulators should let consumers make their own decisions about what kind of car they drive.