Electric vehicles are getting more affordable. Not quite at gas car levels but they’re getting there.
The average transaction price for a new electric vehicle dropped sharply from a year ago, says Kelley Blue Book (KBB), driving up demand.
Tesla’s price cuts have pushed electric vehicle (EV) prices down more than 22% year over year, from $65,295 to $50,683, KBB said this past week.
That’s down almost $15,000 from a year ago.
And in September the average price paid for an electric vehicle was $50,683, down from $52,212 in August.
Tesla recently introduced a rear-wheel-drive Model Y priced at $43,990, the lowest price for the Model Y in the U.S. to date. Tesla has also slashed prices on the Model S and X, with price drops up to 19%.
More recently, Tesla has been aggressively cutting lease pricing. The Model 3 and Model Y base models show payments of $329/month and $399/month respectively (via Electrek.) That’s down from monthly payments of $419/month for the Model 3 and $499/month for the Model Y for base models.
Price and incentives driving sales
EV sales have continued to grow in the U.S. due to both stronger supply and more choice, said Stephanie Valdez-Streaty, director of Industry Insights at Cox Automotive, which owns KBB, in a statement. There were at least 15 new EV models for sale that were not available a year earlier, Valdez-Streaty said.
“Better choices and more options are helping push prices lower and drive higher sales,” she said.
EVs such as the Chevy Bolt EV and EUV, which start at under $30K, have been popular in the U.S. and in some recent quarters have been the second-best selling EV brand behind Tesla.
Cheapest EVs: source: Kelley Blue Book
- 2024 Mini Hardtop 2 door: $26,795
- 2023 Chevrolet Bolt EV: $27,495
- 2023 Chevrolet Bolt EUV: $28,795
- 2024 Nissan Leaf: $29,235
- 2023 Kia Nero EV: $40,875
State rebates and federal tax credits drive down prices even more, sometimes pushing the net price of EVs like the Bolt well below $20,000.
“More choice, downward pressure on prices – is certainly helping grow EV sales,” Valdez-Streaty told me in an email. “EV sales will surpass 1 million units this year, and we are planning for the EV sales to gain share in the years ahead,” she said, though she did add that “average EV prices remain higher than the overall market.”
More supply is helping to lower prices too. At the start of October, EV availability, as measured by days’ supply — which estimates how long it takes to sell a vehicle — was well above the industry average, KBB said.
Since the beginning of the year, EV days’ supply increased sharply while gas car supply has remained constant. EV supply at the start of October was 97 days, KBB said.
Electrify America surge
Electrify America (EA), which runs a network of chargers across the U.S. — second only to Tesla’s Supercharger network — is also seeing a surge in demand for its chargers as a wave of new, cheaper EVs hit the road.
“Utilization increases have been tremendous for us,” Anthony Lampkin, VP of Operations at Electrify America told me in a phone interview. “We had 5.2 million sessions last year, up from 1.4 million in 2021,” Lampkin said.
Electrify America in Los Angeles, one of the largest EV markets in the U.S., has seen demand for chargers in locations like Century City and Santa Clarita (a Los Angeles suburb) jump in the last 24 months.
For example, Electrify America charging stations that were underutilized a few years ago have seen use skyrocket and users often face extended wait times and inoperable chargers, leading to frustration, which is often vented in online forums.
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