Electric vehicle prices are plummeting after close to a decade of significantly higher-than-average prices that made battery electric cars much more expensive than gas-powered cars. Counterpoint Research reports that the drop in EV prices has corresponded with a 32% year-over-year increase in U.S. electric vehicle sales in Q1 2023.
One in every seven cars sold during this period was electric, and battery electric cars made up 73% of all EV sales while plug-in hybrids counted for 17%. As EV prices continue to slide into Q3 of the year, the thought of purchasing an electric vehicle has become more attractive to drivers.
Although the Biden administration is investing billions into building public electric vehicle infrastructure, EV adoption has been low for the entirety of the electric vehicle industry’s existence. On average, electric vehicles cost around $10,000–$20,000 more than similar gas-powered cars, making them too expensive for most of the consumer market.
But with EV prices currency plummeting from their lofty highs, now may be the best time to go electric. Since electric vehicle makers spent years building up their production capacity and optimizing their supply chains, they can now churn out significant numbers of EVs annually. The result is that even though electric vehicle sales are on the rise, EV supply is far ahead of the demand.
Cox Automotive says that even though consumers bought 300,000 EVs in Q2 2023, EV makers still have plenty of inventory left. The company estimates that at current sales rates, manufacturers have enough stock for 103 days. This excess inventory has forced EV makers to cut their prices, with Tesla leading the charge by cutting the price of its four-door Model 3 to just under $40,000.
The pioneering EV company also offered to provide free charging services to customers, further reducing the cost of owning one of its electric automobiles. Ford also reduced the cost of the Mustang Mach-E electric SU. It also cut the price of the F-150 Lightning range of electric trucks to under $80,000, making most of them eligible for the $7,500 federal EV tax credit.
With the EV market maturing and first-time EV buyers trading their first models for newer ones from automakers such as Mullen Automotive Inc. (NASDAQ: MULN), the secondhand EV market can also expect an influx of relatively affordable used EVs. Increased investment in charging infrastructure in certain regions also means that range anxiety is becoming less of a concern for more Americans.
If you are interested in buying a new or used EV but don’t have access to reliable public charging, take time to consider the cost of installing and running a private charger before making a purchase.
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