Among the key reasons many car shoppers are resisting the switch to battery electric vehicles is price. But a new report released Wednesday by auto shopping and research site CarGurus.com contains reveals numbers that might break down some of that resistance.
“The top 10 vehicles seeing the largest price declines year-over-year were made up exclusively of electric vehicles, as they adapt to recent market adjustments as well as high prices last year when fuel prices surged, which impacted supply,” stated a summary of the July 2023 CarGurus Intelligence Report.
The price declines to which the report referred include both new and used EVs with used seeing the biggest price drops.
Some examples of declines in average listing prices for used EVs from July, 2022 to July, 2023:
- Tesla Model S— 42.1% from $73,751 to $42,669.
- Kia EV6—32.7% from $63,939 to $43,035.
- Ford Mustang Mach-E—32.1% from $65,176 to $44,250.
Prices for new EVs have also dropped between July, 2022 and last month, but not as dramatically according to the report which also includes plug-in hybrid-electric vehicles in the list.
Here are few examples:
- Hyundai Kona Electric—10.7% from $44,978 to $40,172.
- Chevrolet Bolt EUV—5.8% from $36,736 to $34,605.
The price drops reported by CarGurus fairly square with those noted in other industry analyses.
They represent a wild swing in overall market and economic conditions from last year, according to Kevin Roberts, director of insights and analytics for CarGurus.
“If we think back to last year, it was right when concern about everything going on in Europe and gas prices were at its peak. So we saw massive increase in interest in EVs really pull down supply, shot up prices,” said Roberts in an interview. “Now that we’re about a year in from that, not only have we started to see use vehicle prices come down, we’ve seen massive depreciations and use vehicle prices. Then you add in things like Tesla and Ford coming out with these price drops on their new variants as well. It’s really pulling down the prices on the used vehicles there. I mean, it’s pretty wild.”
If EVs are indeed getting less expensive, they’re not necessarily easier to find. Automakers may be trying to pump out as many as they can, but according to CarGurus analysis, actual inventories are concentrated in certain regions while some are virtual EV deserts.
“California far and away has the most EV inventory, then you’ve got states like Texas and Florida and some of the east coast states that are shipped more the inventory,” noted Roberts. “For large swaths of the U.S. there’s almost no EVs sitting around.”
A Cox Automotive report on the state of the EV market released in late June said dealers are flush with electric vehicles, but can’t move them as many consumers remain concerned about prices and driving range.
The Cox report pegged dealer EV inventories at the end of the second quarter averaging more than 92,000 units on the ground at dealer lots —a 342% year over year increase.
A memo released Wednesday by consumer rights group Public Citizen took issue with assertions demand for electric vehicles isn’t keeping pace with EV inventories.
“It’s not an EV demand problem, it’s an affordability problem,” wrote Deanna Noël, Campaigns Director for Public Citizen’s Climate Program. “Auto companies like General Motors should be hastening and prioritizing production of affordable, smaller EV models to meet booming EV demand—not slowing production or pricing too many drivers out of the EV market.”
Lower prices also have the ancillary effect of making more EVs eligible for federal tax credits of up to $7,500, notes Roberts.
In her memo, Noël calls on automakers to produce fewer high-end EVs and more that would qualify for federal tax credits making them more affordable and attractive to a greater number of consumers concluding, “EVs should be for everyone who wants them. Car companies need to get smarter and produce the affordable electric vehicles people want to buy.”
Reports by CarGurus and others showing that prices for EVs, new and used, are indeed declining may be evidence what Noël is calling for, is actually starting to happen.
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