High gas prices are displayed at a Shell station on March 7, 2022 in Los Angeles, California.
Mario Tama | Getty Images News | beautiful pictures
Consumers hope to switch to an all-electric or more fuel-efficient car, while Russia’s invasion of Ukraine spurs Gasoline prices record highMuch of it will be down to luck.
A combination of supply chain problem, pent-up demand and record-low vehicle inventories mean many new cars and trucks, including electric ones, are already being heard before they even reach dealerships. Available items are usually full-size pickup trucks, SUVs, and crossovers, as many automakers have reduced or stopped making small cars in recent years in exchange for high-margin vehicles. than.
“Even for people who want to switch to electricity, they have nowhere to go,” said Jessica Caldwell, managing director of Insights at Edmunds.com. “Whatever you’re looking to buy, you’re on a waiting list…or even if you’re looking to downsize your purchase, you’re paying the highest amount. It just doesn’t make sense to do it. now.”
Gas prices have surged since Russian President Vladimir Putin invaded Ukraine two weeks ago. According to AAA, the national average for a gallon of gas is $4.06, up 45 cents a week and $1.30 from a year ago. The United States and other countries responded to the invasion with sanctions against Russia, including banning or cutting Russian oil imports.
Uncertainty and potential scarcity may continue to emerge at the pump.
Meanwhile, customers face months, if not year, in the meantime to buy electric cars. It’s easier to find more luxurious models, but there are little or no discounts available right now.
Morgan Stanley analyst Adam Jonas wrote Wednesday in a note to investors: “Electric vehicles are great if you can afford them (and can afford them).
According to Cox Automotive, US vehicle inventories are down about 60% from a year ago and 70% from 2020 to about 1.1 million vehicles. EVs and hybrids represent only about 25,100 units, or 2.4% of that total supply, as of Feb. 21, according to the company.
“If your plan is to switch to an EV, hybrid or even a compact car, good luck,” said Michelle Krebs, executive analyst at Cox Automotive. “Not many of them are available.”
Among the most available vehicles are Ram 1500 and Chevy Silverado pickup trucks, Jeep Grand Cherokee L SUV and the Mazda CX-5 and Ford Escape crossovers, Cox reports. The least available are the Kia Telluride and Subaru Forester SUVs as well as the Honda Civic and Toyota Corolla sedans.
Automakers have shifted production priorities toward high demand and high profit truck and SUVs as supply chain disruptions and parts shortages have ravaged the auto industry for more than a year now.
As a result, with problems expected to escalate due to Russia’s invasion of Ukraine, many automakers are essentially selling whatever they can produce.
“People will buy what they can get,” said Jay Joseph, Vice President of Marketing & Customer Experience for American Honda Motor Co., in a statement. “There’s no inventory for people to choose from. We see people accepting availability.”
Joseph said about 60% of Honda cars were sold before reaching dealers. Before the recent inventory drawdown, about 75% of Honda’s vehicle sales occurred on-site, he said.
Industry experts do not foresee gas prices, even at record levels, prompting long-term changes in what Americans decide to do. If anything, a spike at the pump could change how much they choose to drive – at least until gas prices stabilize at lower levels.
“We see these temporary changes,” Joseph said. “Over the long term, it’s very easy for Americans to adapt to fuel prices. That depends on how long fuel prices stay high; it depends on how long it’s available.”
—CNBC of Michael Bloom contributed to this report.
