Shift car sale11/28/2023 ![]() Cheap ones get the boot.Ĭonsider what happened at Nissan, which continued to struggle with supply chain challenges throughout 2022. ![]() When automakers can't make as many vehicles as they would like, they prioritize their most profitable cars. Which cars are being made? Not the cheap ones Lower supply, higher prices: It's basic economics. The supply of new vehicles is starting to improve, but those millions of "missing" vehicles are still gone. The semiconductor shortage has gotten much better since 2021, but it hasn't gone away entirely, and other supply chain snarls continue to periodically disrupt output.īecause of these supply chain problems, the global automotive industry has produced millions fewer vehicles than it would have otherwise. Supply chain woes are still reverberating Prices for more expensive cars have risen even higher since the pandemic. But to see where things are headed next in the US, it’s worth keeping an eye on the roads in California.A Chevrolet Suburban is displayed for sale at a dealership in Glendale, Calif., on Aug. Automakers that can’t figure out how to make money on electric options soon are likely to fall further behind those that already have. Even in India, home to the cheapest cars in the world, battery-powered models are starting to make inroads. It could be the biggest industrial build-up in US automotive history.ĮV adoption is accelerating pretty much everywhere. Some $200 billion is being spent on 100 US factories for electric vehicles and the batteries that power them. The US EV market is not so fragile anymore. Until 2020, EV sales in California were largely determined by how many copies of a single vehicle, the Model 3, a single Tesla factory could produce. Some customers are also holding out for new models from America’s iconic brands - Chevy’s Silverado and Blazer, for example - or for the newly refreshed Model 3 or Tesla’s much-awaited Cybertruck. Expensive, low-range EVs that might have been successful five years ago are no longer cutting it. ![]() More than half of US consumers think EVs are the future, according to a recent survey by Cox Automotive, and their expectations are rising around what that future should include. But increasing competition shouldn’t be mistaken for diminishing demand. Investing too soon could squander fortunes on undesired vehicles, while moving too slow risks ceding the market to early movers like Tesla.Īt traditional US dealerships, meanwhile, inventories of unsold EVs have been rising. The transition requires hundreds of billions in capital investments, made years ahead of widespread demand. Alarm bells for automakersįiguring out when EVs will shift into mass-adoption mode is proving an existential challenge for the automotive industry. Sales move at a crawl in the early-adopter phase, then surprisingly quickly once things go mainstream. Think smartphones in the 21st century or color TVs in the 1960s. If the trend continues, a quarter of new car sales could be electric by 2026.įor all good technologies, there comes a point at which sticking with the old tech no longer makes sense. The US as a whole is just three years behind California, and currently tracing its path. The pace of adoption in the state shows no signs of slowing, either, with second-quarter EV sales rising 70% over the same period in 2022. If California were itself a country, it would now rank fourth in terms of overall EV sales only China, the US and Germany sell more.
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