ALEXANDRIA, Va.—U.S. auto industry sales slumped last year, posting the worst sales in over a decade due to supply chain issues and low inventory levels at dealerships, reports the Wall Street Journal.
The U.S. sold 13.7 million vehicles last year, the lowest amount since 2011, declining 8% year over year. Sales were around 17 million in the five years leading up to 2020, when supply chain snarls began and have had an impact on the industry ever since.
However, fourth quarter auto sales numbers were relatively strong, as parts became more available, reports the Journal, an encouraging sign for many auto executives. Still, some are now concerned that the continued supply chain issues from previous years could lead to a supply-and-demand issue, but at the same time, consumers may be hard pressed to afford a new vehicle amid high interest rates and inflation.
“It’s going to make things a lot more challenging in 2023,” Hyundai U.S. chief Randy Parker told the Journal, referring to rising interest rates, after his company posted a slight sales decline for 2022. “There’s still a lot of pent up demand.”
Toyota was unseated as the No. 1 sales leader in 2021 for the first time in decades and also did not rank first last year.
“When we started the year off, the whole industry had projections all above 16 million,” Jack Hollis, Toyota’s North American sales chief, told the Journal.
However, he said it’s not all “doom and gloom” for 2023, as shortages and rising raw-material prices are beginning to ease. Toyota plans to sell 15 million vehicles this year.
Sales at Nissan were down about 25% last year but were only down 2% in the fourth quarter.
“It’s definitely improved,” Judy Wheeler, who oversees U.S. sales for Nissan, told the Journal of the semiconductor shortage. “I’m hoping it won’t be an issue as we move forward.”
Electric vehicles saw increased sales last year, up by two-thirds over 2021. There were 807,180 fully electric vehicles sold in the U.S. last year, which was 5.8% of all vehicles sold, up from 3.2% in 2021.
Tesla is still the dominant EV player in the U.S., selling 65% of all EVs, but the company’s share of the market is declining. Tesla sold 72% of EVs in 2021. Analysts say a decreased wait time for Teslas is causing a softening of demand, and the company offered a rare discount if buyers would take delivery of their vehicles before the end of 2022.
Ford is now the No. 2 seller of EVs, making up 7.6% of the EV market, followed by Hyundai and Kia combined, making up 7.1% of the EV market. Both companies introduced fully electric SUVs this year that were popular. General Motors, Volkswagen and Nissan all saw their share of the U.S. EV market slip in 2022. (GM cut back on its EV target for 2023.)
Ford said it saw the opportunity to establish its electric F-150 Lightning pickup truck as a recognizable name in the minds of early EV-truck adopters.
“All of the brand preferences get thrown up in the air,” he said of the new market for EV trucks. “If we can be the first, it sets the tone.”
Ford’s only formidable competitor is Rivian Automotive, as both are the only brands to sell a significant amount of electric trucks. Rivian’s R1T pickup, R1S sport-utility vehicle and its commercial van had a 2.6% share of U.S. EV sales last year, with 20,332 delivered. However, Rivian fell short of its production targets last year, and several top executives have left the company in recent months, including the vice president overseeing body engineering and its head of supply chain.
At last week’s CES technology show, Ram Truck previewed its soon-to-be-released electric pickup. The Ram Revolution BEV should be released in the coming months, reports CNBC.
“This is a vision, or a glimpse, into the future of Ram Trucks,” Ram CEO Mike Koval Jr. told CNBC. “Honestly, from my perspective, as head of the brand, it is our roadmap on what customers can expect from Ram in the future.”
Rising costs for EV battery materials, including lithium, have caused EV makers to raise vehicle prices. The average price paid for an EV in the U.S. hit about $66,000 last summer, up from about $51,000 a year earlier. A recent Deloitte survey found that cost is the leading deterrent to EV adoption.
The Journal cites a J.D. Power survey that found only three in 10 respondents are able to find an EV that works for them in terms of price, vehicle type and other factors.
“Getting EVs to the market is the key right now,” Stewart Stropp, a senior director of automotive retail who helped oversee the survey, told the Journal.
NACS has created the EV Charging Calculator, which allows retailers to assess the cost and profitability of offering EV chargers at their sites. The calculator focuses on what retailer utility costs associated with EV recharging are and what the corresponding revenue must be to recover those costs after allowing for potential ancillary in-store visits and purchase profitability.
The Convenience Matters podcast, “Where Do EVs Make the Most Sense?” examines the findings from a Fuels Institute study looking at life-cycle emissions for EVs and fuel-powered vehicles. NACS also has a topics page on electric vehicles.