PLS - $2.54 - by 31 Dec 21. Updated., page-366

I was never comfortable with the term "over supply" to describe the downturn in the industry a couple of years ago.

To me "over supply" implies that supply exceeds end user market demand.
The end user market was (largely) the car companies.
Car companies had already indicated their intentions to change over to EV production by the mid 2020's. The problem was, as you say, a lack of converters to satisfy the demand.
In my mind, rather than an "over supply" scenario, that describes a "bottle neck" scenario.

However, the effect was similar: Car companies would not place orders to buy batteries that can't be delivered. Therefore, production must be delayed until the "bottle neck" is cleared.

That has now come about, and the race is on to secure supply agreements.

The term "over supply", in my opinion, was used because it sounds much scarier than "bottle neck". Which is exactly what companies such as Morgan Stanley wanted.