Tesla Model 3 ‘Highland.’
Electric vehicles are becoming more affordable, gradually approaching the price range of gas cars. According to Kelley Blue Book (KBB), the average transaction price for a new electric vehicle has significantly decreased compared to last year, leading to increased demand.
KBB reported that Tesla’s price reductions have contributed to a 22% year-over-year drop in EV prices, from $65,295 to $50,683. This represents a remarkable decrease of nearly $15,000 from the previous year.
In September, the average price paid for an electric vehicle was $50,683, down from $52,212 in August.
Tesla recently introduced a rear-wheel-drive Model Y priced at $43,990, the lowest price for a Model Y in the U.S. thus far. Additionally, Tesla has reduced prices for the Model S and X, with discounts of up to 19%.
Furthermore, Tesla has been aggressively cutting lease prices. The base models of the Model 3 and Model Y now show lease payments of $329/month and $399/month, respectively (via Electrek). This is a significant reduction compared to previous monthly payments of $419/month for the Model 3 and $499/month for the Model Y.
Price and Incentives Driving Sales
The availability of more EV options and improved affordability has resulted in continued growth of EV sales in the U.S., according to Stephanie Valdez-Streaty, Director of Industry Insights at Cox Automotive, the owner of KBB. Valdez-Streaty stated that there are now at least 15 new EV models available for sale that were not on the market a year ago, leading to more consumer choices and lower prices.
EVs such as the Chevy Bolt EV and EUV, priced below $30K, have gained popularity in the U.S. and have occasionally been the second-best selling EV brand, trailing behind Tesla.
Chevy Bolt is one of the best selling EVs in the U.S.
For those looking for the cheapest EVs, consult Kelley Blue Book:
- 2024 Mini Hardtop 2 door: $26,795
- 2023 Chevrolet Bolt EV: $27,495
- 2023 Chevrolet Bolt EUV: $28,795
- 2024 Nissan Leaf: $29,235
- 2023 Kia Nero EV: $40,875
Moreover, state rebates and federal tax credits further reduce the prices of EVs, often bringing the net price of vehicles like the Bolt below $20,000.
Although the average prices of EVs are still higher than those of traditional vehicles, Valdez-Streaty predicts that EV sales will surpass 1 million units this year and expects EVs to gain more market share in the future.
The increase in EV supply has also contributed to price reductions. In early October, the days’ supply of EVs, which estimates how long it takes to sell a vehicle, exceeded the industry average, as reported by KBB. The days’ supply for EVs was 97 days, demonstrating a significant increase since the beginning of the year, while the supply of gas cars remained constant.
Electrify America Surge
Electrify America (EA), the second largest charger network in the U.S. after Tesla’s Supercharger network, is experiencing a surge in demand for its chargers as more affordable EVs hit the roads.
In a phone interview, Anthony Lampkin, VP of Operations at Electrify America, mentioned that they have witnessed tremendous utilization increases. The number of sessions at their charging stations increased from 1.4 million in 2021 to 5.2 million in the previous year.
In high-demand areas like Los Angeles, Electrify America has seen a significant rise in charger usage, with locations such as Century City and Santa Clarita experiencing increased demand over the past 24 months.
Previously underutilized charging stations have now become crowded, leading to extended wait times and occasional charger malfunctions, which have caused frustration among users, expressed through online forums.
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