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Most electric vehicles in the US are still shipped to the same few states

As the US car market rapidly and steadily goes electric, the Volkswagen ID.4 remains at the front of an increasingly crowded field. Americans bought almost 6,200 of them in the first three months of this year.

But if you want an ID.4 in South Dakota, you better act fast; only three in the state are unspoken. The same goes for Arkansas and Mississippi, according to the latest data from CarGurus Inc., a listing platform that aggregates most of the U.S. new car inventory.

The ID.4 is not an outlier either. Consider the Nissan Ariya, another popular newcomer to the EV game. Nebraska and West Virginia each have one Ariya on offer; Wyoming, meanwhile, has two.

There has been a lot of talk about a slowdown in electric vehicle adoption in the US, where according to the International Energy Agency, electric vehicle sales are expected to grow 20% this year, well below the 40% sales growth in 2023. Companies, from Ford to Mercedes to Volkswagen, have announced plans to put the brakes on production of electric models, citing waning consumer interest and a glut of battery-powered inventory.

However, much of that inventory ends up in the same few places: along the coasts and in the country’s busiest auto markets, leaving potential EV buyers in other regions with very few options. The dynamic reflects something of a chicken-and-egg situation for automakers: Their ability to push electric vehicles past early adopters depends on second-wave buyers in a broader range of states. Still, rural drivers may be slower to buy an electric car because they don’t see many options available.

“For this to happen, we will likely need to see more inventory from dealer individual lots,” said Kevin Roberts, director of Industry Insights at CarGurus. “Not being able to see the vehicles can hold things back.”

According to data from CarGurus, nearly a third of new electric vehicles go to one of three states: California, Florida or Texas. To some extent that makes sense: they are the most populous states. If a third of drivers are interested in buying an electric car, that third represents more potential buyers in California than in Montana.

But the byproduct is a lack of options for drivers elsewhere. At the end of the first quarter, about 23 states had fewer than 1,000 electric vehicles on offer, with the exception of brands like Tesla that are closing in on traditional dealerships. Nine states had fewer than 400.

These numbers make buying an electric car daunting for people like Vincent Rossano, a carpenter who lives near Montpelier, Vermont. Rossano planned to buy a Chevrolet Bolt, but the closest one he could find was 220 miles away in upstate New York. (His mother was kind enough to take him to the dealer.)

“I called about 60 dealers throughout New England,” Rossano says. “It was ridiculous: none in Vermont, none in Massachusetts, none in New Hampshire. We even called somewhere in Delaware.”

CarGurus does not collect data about companies that sell cars directly to consumers, namely Tesla, Rivian and Polestar. And unlike these companies, established automakers are juggling the need to produce both battery-powered and internal combustion engines simultaneously, at least in the short term.

But in much of the US, incumbents’ EV inventory is well below local adoption rates. In Colorado, for example, nearly one in five new cars purchased in the fourth quarter were battery powered, while electric cars accounted for just 10% of new car inventory in the first quarter. The gap is similar in Nevada, where 12% of cars purchased by the end of 2023 were electric, but only 6% of cars sitting on a lot.

“There’s this whole narrative that demand for EVs is declining,” said Joel Levine, executive director of EV advocacy group Plug In America. “This year, electric vehicle sales are on track for an increase of 20 to 25%. The curve has shifted, but it’s not like people aren’t asking for the cars.”

In a recent BCG survey of U.S. consumers, 38% of respondents said their next car would definitely be electric, and another 27% said they were considering an electric car.

Drivers have long had a good reason to keep electric vehicles out of the country’s vast open spaces: charging infrastructure, or the lack thereof. The US has traditionally been a patchwork of vast electron deserts. In 2020, China had almost ten times as many public charging plugs.

However, the deserts have virtually disappeared. A construction blitz has turned on thousands of chargers across the US, including in some of the emptiest corners. At the end of the first quarter, there were almost 8,200 public, fast EV charging stations in the country: one for every 15 gas stations.

A bigger problem may be the auto industry’s franchise dealer model. Volkswagen, for example, says its ID.4 is selling well in the Sun Belt – the so-called smile states – and in places like Chicago and Minneapolis, where the brand has long had a strong following.

“If places like West Virginia or North Dakota have a very small percentage of ID.4 sales, that reflects the fact that our dealers aren’t ordering them because no one is asking for them,” said VW spokesman Mark Gillies.

But dealers themselves may not be the best managers of the EV transition. Many are hesitant to deviate from what has been a profitable playbook, selling gas-powered trucks and SUVs.

“I don’t think there’s any evil conspiracy going on,” said Levine of Plug In America, which has a curriculum to train auto dealers to transition to electric inventory. “It’s the nature of car dealers to sell cars they know people want to buy. If you live in West Texas, you’re going to specialize in pickup trucks.”

Currently, only about half of Americans say they know someone who owns an electric car, according to a CarGurus survey.

“If you live in Idaho, you probably haven’t experienced an electric car before,” said Elaine Buckberg, a former economist at General Motors. “Plus, dealers have to order the stuff or be willing to take it, and the dealers aren’t necessarily the most technologically advanced, trend-seeking people.”

The good news for EV proponents is that adoption often happens slowly and all at once. Buckberg says there is a network effect at play. The more electric cars there are in stock, the more people notice them; the more people notice them, the more people try them.

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