By Electric-vehicle (EV) sales in the United States are soaring, setting new records. Cox Automotive, a leading automotive industry research firm, recently updated its U.S. forecasts, projecting that total new-car sales for this year will reach approximately 15.4 million units, surpassing last year’s figure of 14.2 million units. However, it is worth noting that pre-pandemic sales stood at nearly 17 million units. As for EVs, sales in the current quarter are expected to reach around 300,000 units, marking a 48% increase compared to the previous year. Furthermore, EVs are projected to account for a record-breaking 8% share of all new-car sales.
Despite these encouraging sales figures, there is a concerning issue related to EV dealer inventories. Currently, EV inventories exceed 97 days of demand, while traditional vehicles have inventories of only 57 days. Evidently, the industry has produced an excess of EVs. Comparatively, Ford Motor’s U.S. EV sales only grew by 6% year over year through August, while Tesla experienced a more substantial increase of 30% in the first half of this year compared to the same period last year. Although production delays may explain Ford’s relatively modest growth, the core factor limiting EV sales lies in consumer demand.
Cox Automotive anticipates that in the third quarter, EV sales will account for as much as 23% of all new-car sales in California. However, in Michigan and Ohio—home to major automobile manufacturers Ford and General Motors—EVs are only projected to capture a mere 3% share. Despite the close proximity of assembly plants and a substantial employee base, local consumers aren’t rushing to purchase EVs. One plausible explanation for this discrepancy is cold weather conditions, which can significantly reduce an EV’s range by 20% to 25%. A possible solution is to encourage cabin heating while the vehicle is connected to a power source.
To boost EV sales, it is crucial for automakers like Ford and GM to communicate this information to their customers. Additionally, offering more incentives and home-charging hookups could be effective strategies to drive sales. The EV industry has transitioned from its early-adoption phase, in which novelty alone drove sales, to a phase where smart marketing and incentives play pivotal roles in attracting customers.
Companies
Hollywood writers reached a tentative agreement with the studios after a nearly five-month strike. Ford Motor suspended construction of a $3.5 billion EV battery plant that would have used Chinese battery technology. The auto workers expanded their strike against Ford and General Motors. The Federal Trade Commission and 17 state attorneys general sued Amazon.com for “using a set of interlocking anticompetitive and unfair strategies to maintain its monopoly power.” A New York State judge ruled that former President Trump fraudulently inflated the value of his assets. China Evergrande Group suspended trading in Hong Kong after its founder came under police surveillance.
Deals
Amazon took a $1.25 billion stake in AI firm Anthropic, which could go to $4 billion… Wells Fargo agreed to partner with asset manager Centerbridge in a $5 billion private credit fund to lend to midsize companies. Abu Dhabi’s sovereign-wealth fund and Canadian pension fund British Columbia Investment Management have already agreed to equity commitments…Start-up food delivery service Wonder Group said it is buying Blue Apron for $103 million.
Manufacturing Purchasing Managers’ Index
The Institute for Supply Management releases its Manufacturing Purchasing Managers’ Index for September. Consensus estimate is for a 48 reading, slightly higher than the August figure.
Services PMI
The ISM releases its Services PMI on Wednesday. Expectations are for a 53.5 reading, one point less than in August.
Job Openings and Labor Turnover Survey
The Bureau of Labor Statistics releases the Job Openings and Labor Turnover Survey for August. Economists forecast 8.8 million job openings, roughly even with the July data. Job openings are down 27% from their record peak in March 2022 but remain above historical averages. Fed Chairman Jerome Powell recently said that “although the jobs-to-workers gap has narrowed, labor demand still exceeds the supply of available workers.”
Jobs Report for September
The eagerly anticipated jobs report for September has been released by the Bureau of Labor Statistics (BLS). Economists forecasted an increase of 155,000 nonfarm payrolls, with the unemployment rate expected to slightly decline from 3.8% to 3.7%.
Over the past two years, job growth has been incredibly strong, but it appears to have moderated recently. The average monthly increase in jobs from May 2021 to August 2021 was approximately 150,000, significantly lower than the impressive monthly average of 438,000 during the previous two years leading up to May 2023.
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