Declining Average Prices
The average cost of new electric vehicles (EVs) in the U.S. has seen a substantial decrease, falling to $53,438 in June—a 20% reduction compared to the previous year, as reported by Kelley Blue Book. This marks a notable drop from January’s average price of over $61,000 and the June 2022 average of $66,390. In just one year, the typical price of an EV has decreased by nearly $13,000, reflecting a significant shift in the market.
Factors Influencing the Price Drop
Tesla, a dominant player in the U.S. EV market, has been a major contributor to the decrease in prices, primarily due to substantial price cuts. Additionally, increased inventory levels for EVs have led to longer timeframes before vehicles are sold, with the EV segment averaging 103 days on dealer lots compared to the industry average of 53 days. Cox Automotive’s Michelle Krebs highlights that the reduced EV prices are bringing them closer to the industry average, showing a marked contrast to last year’s prices which were higher than luxury vehicle prices.
Market Trends and Incentives
In June, manufacturer incentives for EVs surged to their highest point in a year, averaging $2,048—up 0.2 percentage points from May. This increase in incentives, combined with an overall slight rise in car prices by 1.6% to $48,808, indicates a broader trend of price moderation across the industry. Notably, the decline in transaction prices from January to June represents the largest decrease in the past decade, underscoring a significant shift in the automotive market.
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