Tesla pushed EV prices lower in January, but sales kept sliding

EV prices fell again in January, with Tesla doing most of the cutting. But cheaper EVs didn’t translate into stronger sales, according to new estimates from Kelley Blue Book.

The average transaction price for a new EV fell to $55,715 in January. That’s down 3.1% from December and 0.6% lower year-over-year, even as average vehicle prices across the broader auto market rose.

Tesla continues to set the tone for EV pricing, and increasingly, for the market’s limits. The automaker accounted for roughly 60% of all EV sales in January, and its average transaction price dropped to $52,628, down from $53,678 in December. Compared to January 2025, Tesla’s prices were 2.2% lower, while the rest of the auto industry saw average transaction prices climb 1.9%.

Incentives, however, moved in the opposite direction. EV incentives fell sharply in January to an average of 12.4% of the transaction price, down from a revised 18.3% in December and below the 2025 average of 13.7%. Even with that pullback, EV incentives remain well above industry norms, signaling that automakers are still leaning on discounts to move inventory.

Sales didn’t get the boost automakers might have hoped for. Kelley Blue Book estimates that just over 66,000 EVs were sold in January, nearly 30% fewer year-over-year. Sales were also down about 20% from December, though that was slightly better than the overall auto market’s 25.4% month-over-month decline.

In other words, EVs are getting cheaper, Tesla is still doing most of the heavy lifting, and incentives remain elevated, but price cuts alone aren’t pulling buyers back in as 2026 gets underway.

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