Americans looking for more fuel-efficient cars; Dealerships are running out
More and more buyers are interested in hybrids, electric vehicles and small cars
Gas prices hit record highs in early March after Russia’s invasion of Ukraine triggered a rapid rise in global oil prices.
In early April, vehicle purchase traffic on Kelley Blue Book and our partner site Autotrader showed:
- Buyer interest in electric vehicles has increased 66% since January, when gasoline prices began to rise.
- Interest in affordable electric vehicles has grown even more – purchases of non-luxury electric vehicles have increased by 96%
- New hybrid car purchase traffic increased by 20%, returning to the same levels as in the fall of 2021.
- The fuel-efficient subcompact/compact car segments maintained double-digit gains of 15% from January.
Dealer inventory is low
The timing of the gas price spike couldn’t be worse for auto dealerships. With microchips in short supply, automakers have focused their efforts over the past year on building vehicles with high profit margins — primarily trucks and SUVs — by building fewer small, fuel-efficient cars.
Now that these smaller models are in demand, buyers will likely find a limited supply of the most fuel-efficient vehicles available for sale.
Almost every automaker has at least one new electric vehicle reaching sales lots in 2022, but most are in short supply.
Tesla, maker of America’s two best-selling electric vehicles, faces a months-long backlog. Buyers who order a new Model 3 sedan today can expect delivery in October, according to Tesla’s website. Model Y SUV buyers face an even longer queue, with delivery expected next January.
Ford has stopped accepting orders for its popular Mustang Mach E – the ordering website now simply lists all 2022 models as “not available for delivery”.
Dealerships still stock fuel-efficient hybrids, small cars and small crossovers. But not much.
At the end of March, dealers held an average of 35 days of inventory, about 30% less than a year ago.
But hybrids were in the lowest bid of any segment. Small cars and compact SUVs were also among the segments with the lowest inventory.