Automakers Record Low Inventories While Consumer I
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Posted On: 03/17/2022 4:41:07 PM
Automakers Record Low Inventories While Consumer Interest in Electric Vehicles Increases
The attack on Ukraine by Russia has created a crunch for the electric vehicle industry. The war has led to a sudden spike in gasoline prices just as electric car makers are looking to fulfill their inventory of greener vehicles. Within the last two weeks, Tesla has received approval to set up a battery factory in Germany while Honda, Ford and Stellantis have announced that they are increasing their rates of electric vehicle production.
The skyrocketing oil price is the highest it has been in the last 14 years. The surge is expected to drive consumer interest in favor of green alternatives, following similar trends seen last year during UK’s fuel shortages, which increased online searches of electric cars. As a result, the total number of electric vehicle (EV) registrations tripled to almost 18%.
A similar situation is expected in the United States, where gas prices are breaking records. In comparison to the other big EV markets, Americans are less enthusiastic due to lack of tax incentives that affect affordability, range anxiety and lack of variety besides Tesla. Last year’s EV sales accounted for less than 5% of total passenger cars sold.
Consumer interest was already growing before the surge in oil prices. EV manufacturers and dealers went all out with regard to advertising during the Super Bowl in February. However, it seems that car makers cannot keep up with the resultant demand. The industry is facing supply chain disruptions and chip shortages that have led to low inventory levels. Ford stopped taking orders for the electric F150 pick-up truck in December.
According to Dan Levy, an analyst at Credit Suisse, EV makers tend to update their targets after every six months. This is because their performance is monitored by the supply numbers instead of demand.
The invasion has led giant automakers to shut down Russian companies and move production elsewhere. Moreover, the price of nickel has suddenly shot up because Russia is a key supplier of this metal, which is used in EV batteries. The war will likely affect combustion engine cars, which rely on Russian palladium for catalytic converters.
The unavailability of secure supplies will increase production times and the costs of electric vehicles, and despite the rising interest, consumers might be discouraged by the high prices and the long waiting lists.
Online searches for electric vehicles in the United Kingdom have already dropped since the easing of petrol shortages. According to Stephanie Brinley of S&P Global Mobility, Americans are likely to follow suit and, in turn, this crisis could turn out into a terrible waste.
In times of strife, many opportunities arise. We wait to see how EV companies such as Mullen Automotive Inc. (NASDAQ: MULN) will innovatively navigate the challenges brought by the Ukraine war and the attendant supply chain issues.
NOTE TO INVESTORS: The latest news and updates relating to Mullen Automotive Inc. (NASDAQ: MULN) are available in the company’s newsroom at https://ibn.fm/MULN
Please see full terms of use and disclaimers on the Green Car Stocks website applicable to all content provided by GCS, wherever published or re-published: https://www.GreenCarStocks.com/Disclaimer
The attack on Ukraine by Russia has created a crunch for the electric vehicle industry. The war has led to a sudden spike in gasoline prices just as electric car makers are looking to fulfill their inventory of greener vehicles. Within the last two weeks, Tesla has received approval to set up a battery factory in Germany while Honda, Ford and Stellantis have announced that they are increasing their rates of electric vehicle production.
The skyrocketing oil price is the highest it has been in the last 14 years. The surge is expected to drive consumer interest in favor of green alternatives, following similar trends seen last year during UK’s fuel shortages, which increased online searches of electric cars. As a result, the total number of electric vehicle (EV) registrations tripled to almost 18%.
A similar situation is expected in the United States, where gas prices are breaking records. In comparison to the other big EV markets, Americans are less enthusiastic due to lack of tax incentives that affect affordability, range anxiety and lack of variety besides Tesla. Last year’s EV sales accounted for less than 5% of total passenger cars sold.
Consumer interest was already growing before the surge in oil prices. EV manufacturers and dealers went all out with regard to advertising during the Super Bowl in February. However, it seems that car makers cannot keep up with the resultant demand. The industry is facing supply chain disruptions and chip shortages that have led to low inventory levels. Ford stopped taking orders for the electric F150 pick-up truck in December.
According to Dan Levy, an analyst at Credit Suisse, EV makers tend to update their targets after every six months. This is because their performance is monitored by the supply numbers instead of demand.
The invasion has led giant automakers to shut down Russian companies and move production elsewhere. Moreover, the price of nickel has suddenly shot up because Russia is a key supplier of this metal, which is used in EV batteries. The war will likely affect combustion engine cars, which rely on Russian palladium for catalytic converters.
The unavailability of secure supplies will increase production times and the costs of electric vehicles, and despite the rising interest, consumers might be discouraged by the high prices and the long waiting lists.
Online searches for electric vehicles in the United Kingdom have already dropped since the easing of petrol shortages. According to Stephanie Brinley of S&P Global Mobility, Americans are likely to follow suit and, in turn, this crisis could turn out into a terrible waste.
In times of strife, many opportunities arise. We wait to see how EV companies such as Mullen Automotive Inc. (NASDAQ: MULN) will innovatively navigate the challenges brought by the Ukraine war and the attendant supply chain issues.
NOTE TO INVESTORS: The latest news and updates relating to Mullen Automotive Inc. (NASDAQ: MULN) are available in the company’s newsroom at https://ibn.fm/MULN
Please see full terms of use and disclaimers on the Green Car Stocks website applicable to all content provided by GCS, wherever published or re-published: https://www.GreenCarStocks.com/Disclaimer
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