Electric Vehicle Supply Is Way Behind Demand — When Will It Catch Up?
Production capacity is expanding rapidly, but demand is rising even faster
Electric Vehicle (EV) sales are soaring. In 2021, global sales reach a new peak of nearly 6.6 million units — 8.6% of total vehicle sales, up from just 4% the previous year.
Yet, the number of people looking to get behind the wheel an EV is even higher. Despite massive investment from automakers, the supply of EVs remains far below the number of aspiring buyers.
Wait times for a new electric vehicle is at least a few months, but many of the most popular models have a wait time of a year or more. In extreme cases, wait times can stretch as long as five years.
The shortage of EVs has led to other issues. Since there are more buyers than vehicles to buy, sellers have no issue jacking up prices at an alarmingly fast pace.
Tesla has hiked prices a number of times over the past year (though even that was insufficient to bring demand down enough). Upstart EV producer Rivian announced a massive $12,000 price increase for their flagship truck, and an even larger $14,500 increase for their SUV (they were later forced to reverse the price increases for those with existing orders, but new buyers will still pay the higher price). Not to be left behind, Ford hiked the price of their brand-new F-150 Lightning by $7,000 as well after previously closing reservations altogether.
Traditional brands are often forced to fight dealerships that heavily mark up the limited number of EVs in their inventory, often leaving consumers in a lengthy search to find their desired vehicle at the advertised price.
Of course, EVs aren’t the only vehicles experiencing shortages, but wait times are especially long for EVs. And unlike gas vehicles, insufficient supply of EVs predates COVID.
None of these issues will be resolved until the supply of EVs is much more abundant than it is now — but when can we expect that to happen?
A long-standing constraint has been batteries. Tesla has blamed a shortage of battery cells for delays in bringing some of their new…