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Of course, I agree with your theory… at some point, demand (if the economic contraction continues any length of time) will see a reduction.
At this time, tho, I don’t think we’ve reached the intersection of the demand .vs. supply lines on the graph, although if things continue like they’re going, we’re definitely going to get there.
There’s still quite a bit of pent-up demand for new vehicles (ICE, Hybrid and EV units). Until that demand is reduced by a combination of folks eventually achieving the taking delivery of a new vehicle plus the reduction in demand due to economic contraction, the status quo remains.
It should also be noted that a market downturn often doesn’t affect all models equally. For example, back in the 1970’s during the OPEC oil embargo, many higher line vehicles (Cadillac, Lincoln, etc.) didn’t suffer the hits in demand nearly as severely as the more mainstream vehicles (Chevrolet, Dodge, etc.) saw.
If the consumer determines (either rightly or wrongly) that an EV, even selling at a premium, is the more economically centered choice for his/her needs, it’s quite possible that the demand for EVs actually increases, curating even more vehicle backlogs until production ramps up sufficiently.
Sometimes, these things go in unexpected directions.
At this time, tho, I don’t think we’ve reached the intersection of the demand .vs. supply lines on the graph, although if things continue like they’re going, we’re definitely going to get there.
There’s still quite a bit of pent-up demand for new vehicles (ICE, Hybrid and EV units). Until that demand is reduced by a combination of folks eventually achieving the taking delivery of a new vehicle plus the reduction in demand due to economic contraction, the status quo remains.
It should also be noted that a market downturn often doesn’t affect all models equally. For example, back in the 1970’s during the OPEC oil embargo, many higher line vehicles (Cadillac, Lincoln, etc.) didn’t suffer the hits in demand nearly as severely as the more mainstream vehicles (Chevrolet, Dodge, etc.) saw.
If the consumer determines (either rightly or wrongly) that an EV, even selling at a premium, is the more economically centered choice for his/her needs, it’s quite possible that the demand for EVs actually increases, curating even more vehicle backlogs until production ramps up sufficiently.
Sometimes, these things go in unexpected directions.