Who says electric vehicles are too expensive? New data shows EV prices are nearly the same as gas-powered vehicles. The gap has closed significantly in recent months with new discounts and competition.
EV prices are closing in on gas-powered vehicles
According to Cox Automotive, the average transaction price for an EV was $50,798 at the end of 2023.
Compared to the average gas-powered vehicle at $48,759, EV prices are within $2,040 of closing the gap. Tesla led the way after slashing prices all year.
Tesla’s Model Y and 3 hit their lowest prices ever in October. A new RWD Model Y, starting at $43,990, brought the average down even further as Tesla’s cheapest electric SUV in the US. The Dual Motor AWD and Long Range versions are $48,990 and $52,490, respectively.
With an average transaction price of $50,051, Tesla is slightly below the industry average and within $1,300 of the average gas-powered vehicle.
Tesla delivered over 484,000 vehicles during the last three months of 2023 to hit its goal of handing over 1.8 million EVs last year.
The EV leader is facing more competition, with automakers like Hyundai and Volvo launching competitive electric models. Hyundai sold nearly 47,000 IONIQ 5 and IONIQ 6 models last year.
Hyundai’s IONIQ 5, starting at $42,985, is one of the most complete electric SUV packages available. With up to 303 miles range and fast charging (10% to 80%) in as little as 18 minutes, the IONIQ 5 is gaining ground.
Other electric SUVs like the Ford Mustang Mach-E ($42,995), Toyota bZ4X ($42,000), and Nissan Ariya ($43,190) start below the average.
Meanwhile, new electric models, like Volvo’s EX30, starting at $35,000, will bring the average down further in 2024. With 70 new electric vehicles launching over the next two years, EV prices are expected to continue falling.
EV inventory also remains above the industry average. After increasing 92% last year, EV inventory averaged 113 days’ supply at the end of 2023. ICE vehicle inventory was 69 days’ supply.
Cox Automotive says we will bid farewell to the seller’s market in 2024. The online auto platform predicts slow growth ahead for the US auto industry with lower consumer spending.
Electrek’s Take
Top comment by Troy Frank
The biggest problem (imo) is that the gap has closed mostly by new ICE vehicles getting more expensive, not because of EV's getting so much cheaper. Avg new ICE car not that long ago was $30-35K. So yeah, the EV gap is narrower now, but that doesn't mean more people can afford new cars (of any type).
Will 2024 be the year EV prices reach parity with gas-powered vehicles? It could be close. Then again, with EV adoption climbing, ICE vehicle prices could fall further.
Either way, the misconception that EVs are too expensive seems overblown. With new affordable models hitting the market this year and discounts expected to continue, average EV prices will likely continue falling further in 2024.
Cox Automotive data suggests that EV market share will reach 10% this year and 15% in 2025 as adoption climbs.
Source: Cox Automotive
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