Electric vehicles (EVs) have become the darling of the automotive industry, with the promise of reducing our carbon footprint and improving air quality. A recent report revealed a dramatic drop in new electric vehicle prices - new electric car prices fell - in the US in a year, with the average price dropping by nearly $15,000. This article explores how this happened and what the future holds for EV pricing.
Report Kelley Blue Book (KBB) showed that the average price of new electric vehicles in the US fell by nearly $15,000 over the past year, with the average transaction price falling to $50,683 from last year's average of $65,2951. This price drop is part of a wider trend in the automotive industry, led by Tesla's active price reduction policy. So, the average price of new electric vehicles has decreased by approx 22.42 %.
More price cuts have been recorded in recent months. Also several other institutions and research institutes. The biggest drop was recorded in December 2022, when the average price of a new EV was $61.448, which was 5.5 percent lower compared to November's average price of $65.0422. This price reduction opens the door for more consumers to consider purchasing an electric vehicle, but also points to the possibility that electric vehicle prices could catch up with conventional internal combustion (ICE) vehicles in the coming years.
With this rate price cuts it is likely that the prices of electric vehicles will continue to fall, with the possibility of completely equalizing the prices of classic ones ICE vehicles already within a year or two. In addition, an active price reduction policy by Tesla, one of the leading manufacturers of electric vehicles, played a key role in driving this price reduction trend. Tesla is known for its commitment to making electric vehicles more affordable for the masses, which has contributed to more competition in the market and resulting lower prices.
And looking at the bigger picture, the average transaction price for a new vehicle in the U.S. was down a modest 0.7 percent from last year, to $$47,899. But the really interesting story unfolds in the luxury segment, where Tesla is taking the reins. Kelley Blue Book (KBB) describes Tesla as a leader in the luxury market, with the average transaction price (ATP) of its EVs falling by 24.7 percent, meaning it eclipsed brands like Acura, Lexus, Infiniti and Volvo. For example, the price of the Model 3 has dropped by more than 26 percent to $41,484. Prices of new electric cars fell – and quite a lot!
While Tesla game with more affordable prices, but some other car brands, such as Audi and Porsche, increase the prices of their models by an average of more than 8 percent in the last 12 months. Mercedes-Benz even increased its prices by more than 10 percent. Non-luxury vehicle prices also rose to $44,626, a 1% increase compared to September 2022.
Prices of new electric cars fell
The drop in electric vehicle prices is encouraging news for environmentally conscious consumers and those considering the transition to electric mobility. Prospects for further price reductions and full price equalization with ICE vehicles point to a bright future for electric mobility that will not only contribute to reducing emissions, but also enable more people to be part of the electric revolution.
