Summary
- Massive discounts and new lower-priced models are making electric vehicles more affordable
- Interest in EVs hit a new yearly high in July, with over a quarter of shoppers likely to go electric for their next vehicle
- New vehicle sales are projected to reach over 1.43 million in August 2024, a 4.2% increase from last year
- Automakers have introduced aggressive discounts and lower-priced models, driving the average transaction price down by 4.1%
- Many electric vehicle prices are at or above parity with their gas-powered alternatives due to federal, state, and local discounts.
Article
Interest in electric vehicles (EVs) is on the rise, with over a quarter of new-vehicle shoppers saying they are very likely to consider a battery electric vehicle for their next purchase. This is driven in part by lower prices and aggressive discounts offered by automakers, making EVs more affordable than ever. The average transaction price for EVs has decreased by 4.1%, reaching $44,039, with the average incentive per vehicle expected to be $3,035 in August 2024, an increase of $1,132 from the previous year. This, combined with federal, state, and local incentives totaling over $10,000, has brought many EV prices to parity with their gas-powered counterparts.
In response to the increasing interest in EVs, automakers are offering massive discounts on top of existing incentives, making EVs even more affordable. Some EVs are being sold for over $10,000 off MSRP, with models like the Kia EV9 being sold with an average discount of over $18,000 in June. Subaru’s Solterra was the most discounted car, regardless of being electric or gas, selling for 12% off MSRP. Several models, including the Acura ZDX and Honda Prologue SUV, are also being offered with significant discounts, further driving interest in EVs.
The JD Power EV Index, which tracks the parity of EVs with gas-powered vehicles, reached a record high in July with a score of 56 out of 100. This indicates a growing acceptance of EVs among consumers and suggests that EVs are becoming more competitive with traditional gas-powered vehicles in terms of pricing and performance. EV retail sales remained steady at 9.2% of the market for the second consecutive quarter, highlighting the increasing popularity of EVs among consumers.
As interest in EVs continues to climb and more affordable models hit the market, sales of EVs are projected to increase by 4.2% in August 2024, surpassing 1.43 million units. This growth is attributed to the availability of lower-priced models and aggressive discounts offered by automakers, which are bringing EV prices closer to parity with gas-powered vehicles. With the development of charging infrastructure in the US and the satisfaction that Ford and Rivian owners are experiencing with access to the Tesla charging network, the future looks promising for the EV market.
Overall, the affordability and increasing interest in EVs are driving sales growth in the market. With the availability of federal, state, and local incentives, along with significant discounts from automakers, many consumers are finding EVs to be a viable option for their next vehicle purchase. As more affordable models become available and charging infrastructure continues to expand, interest in EVs is expected to continue growing, further solidifying their place in the automotive market. The success of EVs in attracting buyers is evident in the sustained growth of sales volume and the record high interest levels observed in recent months.
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