Consumer Reports (CR) surveys have shown a 350% increase in consumer demand for battery electric vehicles (BEVs) between 2020 and 2022. While automakers are ramping up supply, the fact that the vehicle fleet turns over very slowly means that most consumers will have to wait a decade or more for an opportunity to own a BEV.
For consumers who said in our 2022 survey that they would “definitely buy or lease” a BEV if they were to get a vehicle today, demand is unlikely to be met until at least the end of the decade on the current supply trajectory—and a virtuous cycle is shaping up that appears poised to rapidly increase consumer demand even further in coming years. This rising tide of demand is projected to be met by lagging supply, leaving many consumers who want a BEV to choose between settling for a gasoline vehicle they don’t want, joining an ever-expanding waitlist, or just waiting it out and holding onto their existing vehicle for longer.
Automakers that are too slow to move may find themselves struggling to find buyers for all of the conventional gasoline vehicles they currently plan to build as they simultaneously attempt to catch up with accelerating BEV demand. Failure to respond quickly enough to rapid shifts in consumer preferences will pose significant risks to legacy automakers, and the risk of being too late may prove much greater than the risk of being too early. Regulators have an opportunity with the establishment of new emissions and efficiency standards to ensure that the industry stays on a trajectory that doesn’t leave consumers waiting.
See above for the PDF icon to download the full report “Excess Demand – The Looming EV Shortage.”