It’s never been cheaper to buy an EV. Here’s why.

New electric car prices dropped $2,000 in the U.S. last month, bringing EVs close to price parity with gas-powered cars.

By Nicolás Rivero  March 18, 2024 washingtonpost.com

The price of electric cars is plummeting so fast that they’re now almost as cheap as gas-powered cars.

Since EVs first hit the market, car buyers have had to pay a steep premium if they wanted a car that ran on batteries instead of a gas engine. Two years ago, they would have paid about $17,000 more on average for a new electric car than for a new gas-powered car. But that gap has been rapidly closing, shrinking to $5,000 last month, according to data from Cox Automotive.

That’s an 11 percent markup over the average new car price last month — roughly similar to the price difference between picking the base model of some cars vs. the performance model that comes with all the bells and whistles.

Tesla is setting electric vehicle prices so low, they’re almost even with gas-powered cars.

Of course, part of the reason EV prices are plunging is that consumers are not buying them as fast as dealers and automakers expected. As the industry moves beyond enthusiastic early adopters, it now faces car buyers who are concerned about charging infrastructure and high upfront costs.

So car dealerships are discounting electric cars on their lots. Average EV prices dropped $2,000 last month. “We’re going to continue to see price cuts or discounts just because there’s inventory and [dealers are] really trying to get these sold,” said Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive.

That’s good news for Americans in the market for a new car who might be considering going electric. “Price is always one of the top barriers for adoption, so I think getting down to price parity is key,” she said.

Which EVs are getting cheaper?

Tesla, which sells more electric cars in the U.S. than all other automakers combined, has been the driving force behind the EV price plunge. The automaker started slashing the price for its popular Model Y SUV and Model 3 sedan in January 2023, dragging down the average for all electric cars. For instance, the base Model 3 sedan, which cost $47,000 at the beginning of 2023, now sells for $39,000. The premium Model Y dropped from $70,000 to $52,500 in that same period.

Tesla is probably cutting prices to maintain its market share as rival automakers start selling electric cars, Valdez Streaty said. There are now 57 EV models for sale in the U.S., according to Car and Driver magazine. While Tesla once commanded roughly 80 percent of the U.S. market, it’s now clinging to a bare majority — and most of its top competitors are also cutting prices.

“Tesla still dominates, but … there’s so much more competition now,” Valdez Streaty said.

EV prices are set to keep dropping

Last month’s drop in EV prices is part of a long-term trend toward cheaper electric cars, mainly due to falling battery prices. Batteries are nearly 90 percent cheaper today than they were in 2008, according to the U.S. Energy Department.

“Batteries can make up as much as 40 percent of the cost of the vehicle,” Valdez Streaty said. “We’re going to see battery prices continue to drop … so I think we’re going to start to see this closing near that price parity.”

The cost to make a new electric car could fall to the same level as gas-powered ones as soon as 2027 because of more efficient manufacturing, according to a March 7 report from the technology consulting firm Gartner.

Cost is the main barrier for U.S. car buyers thinking of making the switch, according to a 2022 Cox Automotive survey. If prices keep dropping as they did last month, more Americans may be willing to ditch their gas-guzzlers for electric cars.

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Yep, everyone is entitled to their opinion.  Since I have clients that pay me for my opinion and research, I feel an obligation to point out that there are risks in ignoring things that they may not agree with or that they think are not important.  Whether someone believes in climate change or not, if we live in a world where government and business believes in it we need to take that into account.  All one need do is look at the billions of dollars flowing into EVs, batteries, memory chips, AI and now from an energy standpoint - lithium from brine - to see what business thinks of the future.  I think I post a balance of topics informed by what I am seeing in real time on my internet alerts and in my news feeds which are germaine to mineral issues.  I have 14 discussions on the main page currently and 12 are directly related to mineral issues including lithium brine in that category.  The number of views for those topics tends to prove the interest in them.

my opinion.  Yes EV industry generates a lot of money. It will continue to get stronger as the years go on  this is something we can agree on. What I disagree on is why. I believe why is a false priesthoods . But you already heard my thoughts on that. The whole deal with gohaynesville is money. Why ? Minerals. Obviously minerals for oil and gas are way more than is is for brine and lithium.  Why , there’s no demand for lithium   People in southern Ark and TX are getting garbage for there minerals when it comes to lithium. I personally know this for fact.  People on this web site want insight on what to do for minerals/land in general. Why ? Because it could be a means of secondary income and in this economy anything extra will make difference. We all know your a land man with BDE nobody is asking for more as far as advise.  We get it you make a living on land and title. People just don’t wanna get jipped out of money.  My point lithium could possibly be the future but it’s not right now. Haynesville shale and Barnett  powers the EVs here in the south. 

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