As Consumer Interest Falters, Dealers Struggle to Move EV Inventory Off Lots
While the UAW strikes did not impact overall car prices, they created additional roadblocks for traditional automakers’ burgeoning electric pushes
Though both new and used car prices continue to fall, they remain more expensive than they were at the start of 2023
Chicago, IL – November 20, 2023 – The UAW strikes have created yet another obstacle for traditional automakers as they struggle to compete with Tesla’s dominant market share in the EV market, according to new data and analysis from leading AI car shopping app CoPilot. New EV inventory has jumped to a staggering 91 market days supply, more than doubling their supply levels from November 2022. New EV inventory levels are also 47% higher than those of gas-powered vehicles, which have a current market days supply of 62 days, indicating that consumer demand for EVs pales in comparison to current inventory levels.
“Traditional automakers produced way too many EVs for current demand levels, and are now faced with an inventory glut,” said Pat Ryan, CEO and Founder of CoPilot. “At the same time, they’re still adapting to the learning curve and developing scaling efficiencies. This fall’s UAW strikes only compounded these challenges for them, with the walkouts costing the Big 3 as much as hundreds of millions of dollars per week. Moving forward, it will remain a major challenge for these manufacturers to catch up to Tesla, which has the early mover advantage in the EV category and is outmaneuvering them in every category: price, consumer popularity, margins, and infrastructure.”
Hybrid vehicles – which appeal to many consumers due to their lower barriers to entry in comparison to EVs – have been able to capitalize on EVs’ lagging adoption curve. They have the lowest inventory levels of all vehicle types, at 57 market days supply, and amid strong customer demand, some of the most popular models on the market have fallen to dangerously low supply levels, with new Honda CR-Vs at just 26 market days supply, Kia Sportages at 25 days, and Toyota RAV4s at a mere 14 days. Automakers are also doubling down on hybrid popularity: Toyota recently announced plans to sell the Camry, its best selling U.S. vehicle, in hybrid form only.
More broadly, in the wake of the UAW strikes that targeted the Big 3 automakers earlier this fall, both new and used car prices overall remained relatively unaffected. Since the strikes began in mid-September, new cars have actually fallen in price by $1,200 (or 2%) to an average of $50,089. Meanwhile, used cars continued to fall in price for the sixth consecutive month, down by a cumulative $1,145 to a new average of $30,939.
Despite prices finally coming off record highs, new cars are still listed nearly $400 above their January 2023 levels, while used cars are priced $300 more than they were at the start of the year. As consumers continue to be bogged down by sticker stock, demand for new cars in particular has slowed significantly, with their inventory increasing by 29% in the past six months, to 63 market days supply. This also marks the highest inventory levels for new cars since November 2020.
Demand also remains weak at the lower end of the market, as the impact of interest rate hikes and limited financing options keep more car shoppers out of the market. Sales of 4-7 year old vehicles fell by 14% in the past six months, while sales of 8-13 year old cars declined by 13% in that same time period.
Newer, more expensive vehicles, however, have seen more substantial declines, after experiencing the most significant price increases in the spring. In October, 1-3 year old vehicles fell in price by $394 (or 1%), to an average of $38,505. Luxury vehicles are the vehicle type that is currently closest to returning to normal levels, priced 21% above projected normal. In the past month alone, they declined in price by 7%, to an average of $39,275.
“While we’ve seen some softening in the car market, prices have not come far off record highs, and consumers are taking note,” Ryan added. “Especially headed into the winter months, which is seasonally a slower time in the car buying market, we can expect many consumers to remain on the sidelines until prices finally start to come down in a more substantial way in 2024.”
About CoPilot
CoPilot is the world’s first AI-assisted car shopping app. Its intelligent agent assistant, AI Sam, guides consumers through the process of finding and selecting their ideal vehicle, based on their personal preferences – including budget, vehicle type, color, engine, trim, and more – as well as CoPilot’s proprietary insights and analysis about these vehicles. It provides curated and ranked recommendations for the perfect vehicle to meet their needs, as well as real-time information on its price and availability, based on their location. Consumers can also ask AI Sam questions about specific cars and the car buying process, allowing them to access all the information they need in one place.
Media Contact:
Kerry Close
732-609-2644
