Has the Pandemic created an EV Car boom?
Image of Covid-19. (Photo Courtesy: CDC)
Covid-19 and the Impact it has on the EV and Traditional Car Industry
By: Jessica Lin
To say that a lot has changed a lot for everyone, every industry, and everything and this has impacted everything in one way or another would be an understatement.
The automotive industry has been hit especially hard as the pandemic changed all aspects of buying, leasing, and financing a car and, one would have guessed this a year ago, people now are buying cars at a rate that hasn’t been seen before. That said, with increased demand, there has been a decrease in inventory as the global markets for semiconductor chips, an important component in EVs, are experiencing a massive shortage, making the chances of buying a new one a lot more expensive. This is also one of the reasons why Borrow is such a great idea for getting into an EV right now with zero hassle.
Though there has been low inventory for new cars, the demand for used cars has also risen. Carvana, an online used car dealer, has seen a 37% increase in sales from 2020. They’ve sold more than 244,000 cars last year alone and the sale of used cars doesn’t seem to be slowing down either. In areas such as LA, 86,994 used cars were sold during a 30-day period that had an increase of 52% from a year prior. Of course with the rise in buying of used cars, the price tag of these used cars is also being driven up. Such that the cost of used cars and trucks jumped 10% in April and was up 21 percent compared with a year earlier.
This boom in used cars has caused many policymakers and economists to watch the used car industry very closely as it can impact inflation rates. Economists and the Fed believe that if prices are increasing for the used car industry, this might spread over to other industries and cause an increase in inflation. Though many economists are worried over this surge in prices for the used car industry, they also believe this would pass over during the next quarter.
The pandemic indeed has impacted the car industry immensely. Especially for the new and used car industry as one has increased demands and subsequently a lower inventory and the other has a boom that drives more customers to the used car’s door. As one industry seems to go up, the other one will go down. The pandemic has created opportunities for everyone, but also a decline for others.
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