- For the first time in nearly 18 months, the average new EV cost less than the average Tesla
- Dealers are cutting prices on used EVs and offering incentives on new ones
- The average discount on an EV was 12.4% of the average transaction price in May, nearly six points lower than the industry average
Average EV prices have fallen over the past two months, with the rest of the industry catching up with Tesla's price cuts, reports Cox Automotive (via Automotive News).
The average EV transaction price across all brands (including Tesla) was $55,235 in April, or $433 less than Tesla's average. That marks the first time the industry average fell below that of Tesla since February 2023, notes Automotive News. In May, the industrywide average for EV transaction prices was $721 less than the Tesla average, at $56,648.
2024 Tesla Model Y. - Courtesy of Tesla, Inc.
Tesla has cut prices many times over the past year, but other automakers now also appear to be joining in. The average EV discount was 12.4% of the average transaction price in May, nearly six points higher than the industry average, according to Cox.
EV prices have been volatile over the past six months, Cox noted. They remained around $57,000 from December to February, fell to $53,000 in March, but in May they rose back up to nearly the same place as they were in December. The gap to Tesla completely disappeared in that time, though. In December, the overall average price of an EV was $7,276 higher than Tesla's average, according to Cox.
2024 Hyundai Ioniq 5
Discounts may be an acknowledgement of reality. Concerns over new EV costs are at the core of a drop in consumer consideration, according to a J.D. Power study published in May. A dearth of affordable EV models and shrinking availability of the $7,500 federal EV tax credit due to new rules that went into effect at the beginning of the year haven't helped matters.
Cox also noted an 84% surge in sales of used EVs in May. That's helped by a shrinking price gap with used gasoline cars, which narrowed to $1,100 the week of May 6. Earlier this month, iSeeCars reported, based on surveying posted asking prices for used cars, that used EV prices actually stood below internal-combustion prices. Lower used EV prices could also put pressure on automakers to discount their new EV models.
