Huge price reductions, lots of new models and plenty of availability looks set to provide a boost to the electric vehicle market, which has already seen record sales in 2023.
Kelley Blue Book - the vehicle valuation and automotive research company that is recognized by both consumers and the automotive industry - announced in June that the average transaction price for a new electric vehicle ($53,438) was down 20 percent from a peak of $66,390 in June 2022. The Financial Times reports that many of the price changes can be traced back to Tesla’s decision to slash its prices by up to $13,000 in January.
In good news for buyers, Tesla's move sparked a price war among manufacturers, with Ford quickly following suit. It cut the purchase price of its Mustang Mach-E. Than, Tesla responded by making its Model S and Model X models even less expensive in March.
Ford has made further price reductions, offering savings of between $6,079 and $9,979 on seven of its F-150 Lightning models, The New York Times reported in July. GM also joined the price-cutting party in June, slashing prices on the Bolt model.
According to Cox Automotive, nearly 300,000 new electric vehicles were sold in the United States during the second quarter of 2023. That marked a record for any quarter and is up by 50 percent from the same quarter last year.
“The demand is not keeping up with production, which is the opposite story of a year ago,” said a Cox Automotive analyst. “We call it the ‘Field of Dreams’ moment. Automakers are building more, but not enough consumers have come to the field.” The analyst also noted: “A year ago, the average EV price was above the average luxury vehicle price. Today, as inventory and availability build, EV prices are moving closer to the industry average.”
Price parity has long been considered a potential inflection point when EV sales suddenly accelerate. In the meantime, the knock-on effect of new prices falling is that second hand prices are also falling. So, whether you're in the market for a new or used EV, your timing has never been better.