Cloud Theory has written extensively about the dynamics of the electric vehicle market, most recently in its deep-dive report entitled Charging Ahead: Hybrids Come Into Sharper Focus as EV Aspirations Meet Reality. In that analysis, it was detailed how the easing of EPA regulatory requirements earlier this year (from two-thirds of 2032 production needing to be EVs down to 35%) had enabled OEMs to shift production priority and communications emphasis towards hybrid vehicles.
Our latest inventory, movement, and efficiency numbers already point to industry and consumer shifts resulting in a better balance between EV supply and demand.
In the past 90 days, despite overall industry inventory growth of 4% on a period-over-period basis, (non-Tesla/Rivian) EV supply has shrunk by 2%. This has resulted in an inventory share of 5.9%, down 0.4 points from the prior 90 days.
Meanwhile, the market share of these vehicles increased by 0.7 points to 4.8%. A 2.2-point gap between inventory share and market share 90 days ago has been cut in half.
Also encouraging is a 6-point increase in turn rate, from 24% to 30% over that timeframe. While this still lags the overall market (which sits at 37%), it is a decided improvement over the past when OEMs were overproducing EVs to get a leg up on the looming requirements.
It is noted that hybrids have also been thriving in this most recent period, with a 0.5-point gain in inventory share and a 1.0-point increase in market share. Its turn rate, meanwhile, ticked up by one point to 53%—the highest of any fuel type.
The shifts in EV dynamics are not done (especially if there is a change of party coming to the White House after next week’s presidential election). But the automotive market is nothing if not adaptable and resilient in demonstrating that it can shift to an outcome that balances the current needs of the regulatory bodies, consumers, and manufacturers.
More to come…
