battery charging station.
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- If you’re looking for a discount on a car, you might want to consider an EV.
- Clearance deals on bloated EV inventory may help adoption.
- Tesla price cuts have led an industry-wide downward trend in EV prices this year.
Cars are more expensive than they’ve ever been — and that’s good news for the electric vehicle market.
After about three years of steady momentum in the EV market, there are signs that its growth may be easing. Wealthy early adopters have largely made their purchases and now electric car sellers face the challenge of converting more average and price-conscious customers to EVs.
Several barriers to entry still stand in the way of EV purchases for most car shoppers, including range anxiety and access to charging. But a slew of deals on EVs this past year may help soften the pricing barrier for some shoppers.
As car companies produce more EVs than ever, these cars are starting to pile up on dealer lots for the first time. Any glut of inventory usually comes with clearance sales of some kind — an EV trend that started at the beginning of this year with Tesla CEO Elon Musk slashing prices of the slow-moving Model S and Model 3 sedans.
On average, electric cars were selling for around $2,000 over sticker price last year, according to Jessica Caldwell, an automotive analyst for Edmunds. This year, average transaction prices for non-Tesla EVs are coming in about $1,600 below sticker prices.
“We’re definitely seeing a slowdown for the mainstream EV brands,” Caldwell said. “Part of that is Tesla flooding the market with cheaper models.”
Looking for a discount? You might want to shop electric
In addition to the Tesla effect, an easing of the EV supply chain woes that have driven up costs for the last few years is likely to start to drive down EV prices.
Automakers were ambitious with their EV prices in an attempt to reduce their losses from the vehicles, but early EV battery supply chains haven’t helped matters. The cost of crucial battery minerals, and the widespread industry demand for those materials, sent costs skyrocketing. As the EV industry scales more and more, the natural progression (albeit slow) is that battery pricing — largely to blame for the overall high cost — will come down.
On average, EVs are still more expensive, on average, than gas-powered cars, with EVs going for about $53,469 in July, says Kelley Blue Book (down from $66,000 a year earlier). That gap is slowly closing, particularly for pickup trucks and compact SUVs, according to J.D. Power. And with help from new federal tax credits, leasing deals abound on electric cars.
A list of the cheapest EV leases compiled for Insider by Edmunds found several models with monthly payments around $400. That’s compared to an industry-wide average of $598 monthly lease payments in July.
Meanwhile, Teslas are cheaper than they have ever been, forcing competitors like Ford’s Mustang Mach-E to lower prices earlier this year. The Model Y now retails for around $47,000, while the Mach-E starts at nearly $43,000. The average new vehicle transaction price this month is around $45,537, according to J.D. Power.
Even with price reductions, the Mach-E is piling up at dealer lots, and some dealers say they’ve had to turn away allocations of the electric SUV and other plug-in models.
The most expensive EVs are getting the biggest price slashes
While demand for the Mach-E appears to cool, Ford is looking to bolster demand for the electric F-150 Lighting with some hefty price cuts.
The base price for the Lightning dropped by about $10,000 last month to $51,990. That’s still more expensive than the originally advertised price of $41,769, but reverses months of price hikes as orders for the electric truck flooded in.
Even some of the more expensive EVs are dropping in price rapidly, too. Various trim levels for EV startup Lucid’s luxury electric sedan go for $82,400, $95,000, $125,600, and $249,000.
Those price tags came after controversial price hikes and then cuts that ultimately brought their cost closer to what the company originally promised. Shoppers can now get the lowest Lucid trim level for a $749 monthly lease — indicating Lucid and others are likely to lose even more per EV than they were, purely to get more inventory out the door.
Some industry leaders are already seeing a positive response to these moves — indicating more movement is yet to come.
Ford saw a sixfold increase in Lightning orders from its latest cuts, while Lucid’s CEO said its changes were “well received.”
