According to the latest data from Cox Automotive, the average price of electric vehicles (EVs) in the United States has been steadily declining. The influence of Tesla’s price cuts has resulted in sharp month-over-month and year-over-year decreases in EV prices. In July 2023, the average price for a new EV was $53,633, but by August 2023, it fell to $53,376, representing an 18.7% drop compared to August 2022.
These prices could potentially be even lower when factoring in federal and state incentives, making EVs more affordable for buyers. Cox Automotive’s chief economist, Jonathan Smoke, believes that the surplus inventory and increased competition in the market could lead to further price reductions. This would positively impact consumers considering EV adoption.
While Tesla’s direct-to-consumer sales model has contributed to declining expectations among franchised auto dealers, it is important to note that non-Tesla EV sales are still growing. However, the growth curve for these vehicles is not as steep as Tesla’s. Smoke describes this phase as a “natural speed bump” in the overall growth of the EV market.
Tesla’s impact on this trend is undeniable. The brand currently holds a nearly 60% market share in the EV space, with 390,377 new registrations in the US during the first seven months of 2023. In the past 12 months, Tesla has implemented multiple price cuts worldwide, further driving down the average transaction price of its vehicles. In August 2023, the average price of a Tesla decreased by 19.5% compared to the previous year.
Contrasting this trend, the average price of hybrid and alternative fuel vehicles has increased by 18.1% over the same 12-month period. Despite this increase, hybrids continue to be more affordable than pure EVs.
Overall, the decreasing prices of EVs, driven largely by Tesla’s price cuts, are a positive development for consumers considering EV adoption. The surplus inventory and increased competition in the market are expected to further decrease prices, making EVs more accessible. Additionally, government incentives and manufacturer discounts contribute to making these vehicles even more affordable.
Source: Cox Automotive