Now that you’re flush with cash from pandemic-induced savings and a series of federal stimulus checks, it may feel like the perfect time to buy your first electric vehicle.
But if you’re a Utah resident, you might want to keep that extra-long extension cord bundled up for the time being.
A global shortage in the high-tech semiconductor chips that have become the lynchpins of modern automotive manufacturing was first noticed last fall, and the fallout has been impacting the global car market ever since. The problem rose to become a major issue for automakers, with some manufacturers significantly slashing production of some of the world’s most popular models and, in some cases, holding off on releasing new, all-electric vehicles.
The result has been far fewer vehicles available for purchase as the waning pandemic has lit the flame on pent-up consumer demand for a new ride. Given the robust customer interest, dealers likely could sell many more cars and trucks — if they were available.
While restrictions wrought by the COVID-19 pandemic laid waste to large swaths of the retail sector, car sales actually fared very well and, in Utah, were up significantly even in the early months of the health crisis. Now, however, the supply side of the equation is wreaking its own kind of havoc.
“The car industry is doing OK, and we will hopefully come out of COVID OK,” Craig Bickmore, executive director of the New Car Dealers of Utah association, told the Deseret News last month. “The dealers have done OK and we’re grateful. But what’s happening now is inventories are tight for reasons that have been in the news a lot — inventory is tight and will probably get a little tighter as manufacturers work through those issues with supply chains.”
And nowhere is this economic dilemma more evident than in an unprecedented confluence of record-high interest in electric vehicles and a meager, if not nonexistent, number of the battery-powered buggies available on dealership lots not just in Utah but across the country.
Even large Salt Lake dealerships have only a few, if any, all-electrics available for purchase and the world’s biggest electric vehicle maker, Tesla, is citing a wait of up to three months for their “entry level” Model 3, which starts at just under $40,000.
Glen Schmidt, who chairs the department of operations and information systems at the University of Utah’s David Eccles School of Business, said electric vehicle manufacturers were preparing for a big market jump a couple of years ago that never really came to fruition. But now that surge appears to be in full effect.
“There’s something called the S-curve in product innovation,” Schmidt said. “You hit an inflection point where all of a sudden things take off. Things like battery production were ramping up a few years ago when automakers thought demand was going to take off, but it didn’t happen.
“Now, it seems that we’re finally there.”
And new data from Cox Automotive’s report on U.S. auto sales for the first quarter of 2021 supports the contention that interest in electric vehicles has been truly sparked.
U.S. sales of hybrid and electric vehicles were up 81% in the first quarter of 2021 over the same time period last year, and now account for 7.8% of all U.S. auto sales, up from 4.8% a year ago.
Cox reported that there are now more than 60 hybrid or plug-in hybrid vehicles available in the U.S. Tesla currently outpaces all competitors, and sold over 69,000 vehicles in the first three months of the year. The Tesla Model Y is top seller so far in 2021, with the…