For the past couple of months, we have been focused on the latest UAW Strike from a "Parts Perspective". As Parts Managers, this is pretty obvious, but how is this UAW Strike effecting New Vehicles Sales from the interruption of New Vehicle Production & Manufacturing?
Parts Distribution is not the only interruption caused by this latest walkout as it also included assembly line workers as well. You would think that this assembly line interruption would eventually lead to fewer and fewer new vehicles on our lots at the dealership, much like we felt during Covid-19 and the computer chip shortage.
In this month's issue of ACG "Smart Parts", we are going to focus how this UAW Strike is affecting our New Vehicle Sales and especially how it's effecting Electric Vehicle, (EV) Sales in particular as new EV Sales have been on the rise even before the UAW Strike.
In a recent article in NADA Headlines, written by Automotive News, our dealers' New Vehicle Inventories are continuing to build despite these production interruptions from the UAW Strike.
The article also reports that consumer new vehicle shopping has also remained robust through the third quarter of this year. Cox Automotive estimated that automakers began October with 2.1 million vehicles, up 150,000 from September.
Seems like the Automakers did pretty much what we did and stocked up before the UAW Strike hit in mid-September. That being said, it looks like, for now anyway, that dealers have an ample supply of New Vehicles for customers to choose from.
But, when you break this number of New Vehicles down, from Combustion Powered Vehicles versus Electric Vehicles, (EV's) and Battery Electric Vehicles, (BEV's), there appears to be some very different perspectives in the marketplace happening right before our eyes.
So!...What About Electric Vehicle, (EV) Sales?....Are They Rising or Falling?
Back in March of 2022, ACG "Smart Parts" focused on the Parts side of this EV Revolution with our issue titled "The Parts Department in the EV Revolution". In that issue, we focused on just what parts we may be stocking for these EV and Hybrid Model Vehicles.
Now, in this issue, we are going to focus where this "EV Revolution" is, and where industry analysts are saying it may be headed from a few different perspectives. We will see that there are very different takes on this and from there, we can come up with our own conclusions.
There is no doubt that EV's are and have been on the rise over the last several years. A recent article published by cleantechnica.com shares the following....
"With more electric vehicle choices than ever, EV Sales in the U.S. are hitting new heights. In just the first half of 2023, over 670,000 EV's were sold with over 80% of those being fully-electric battery electric vehicles, (BEV's) . It took over 8 years for the first million EV Sales, but now more than a million have been sold over the last 12 months."
From this statement alone, one would believe that this EV Revolution is going to keep rising and rising each year. We would also perhaps believe that we will see EV Charging Stations continue to rise as well.
But could this rise of the EV Revolution perhaps be rising a little too fast?
As we all know, there are always two sides to every story as the Wall Street Journal also reported in the latest edition of NADA Headlines as follows...
"The auto industry's push to boost sales of electric vehicles is running into a cold hard reality that buyer's interest in these models is proving shallower than expected. While EV Sales continue to grow, rising 51% through September of this year, the rate has slowed from a year earlier and unsold inventory is starting to pile up for some brands..."
Business Insider.com even adds their take on the current EV market and where it may be going with these statements...
"Car dealers have a warning for their manufacturers: the day of early-adopter electric vehicle sales are all but over. For years, early EV adopters are more fickle. More and more often they are comparison shopping EV's against hybrid and gas-powered vehicles.
That's leading dealers to use more aggressive sales tactics on "plug-in" models. They warn this could make EV demand appear more robust than reality, and make it harder for car manufacturers to predict demand"...
"More dealers now are really pushing EV's off their lot, which probably distorts the reporting manufacturers are looking at says Vince Sheehy, a car dealer in the Washington, D.C. area, told Insider. Vince Sheehy also went on to say that he believes EV Sales are even lower than they actually understand them to be"...
"The warning bell from dealers is the latest sign that after years of exponential growth, the electric car segment is facing a looming plateau. Already, car companies seem to be reacting to changes in demand, after overshooting their EV predictions for this year."
Overall, when combining all New Vehicle Sales thus far this year, and according to Kelley Blue Book, in an article at NPR.com, the average transaction price for a new vehicle in July was $48,334.00, a slight dip from June and only a 0.4% year-over-year increase.
The article continues to say that this could present an opportunity for those who have been waiting for prices to cool before purchasing their next ride, even as interest rates remain high.
All of this said, many are saying that we are headed into a "deflationary market" where patience may be rewarded. If we wait to buy tomorrow, we may actually get a better price than if we purchase today.
It appears that we definitely have two sides of this story and a few different perspectives for sure. The UAW Strike appears to be a non-factor thus far as we look at New Vehicle Sales in general, and how EV Sales have weathered all these up and down swings in the current marketplace.
That being said, Charlie Chesbrough, Senior Economist and Senior Director of Industry Insights at Cox Automotive, which owns Kelley Blue Book in this same article at NPR.com warns...
"Be aware of what are the offers out there, do your homework, because manufacturers are certainly going to be more willing to negotiate on price today than they were a year ago"...
So I guess when we asked the question early on if Electric Vehicle, (EV) Sales are Rising or Falling?....I guess that answer would be a resounding Yes!
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