Electric vehicles have always been expensive. The first Tesla Roadster cost more than $100,000, and more than a decade later, the average electric vehicle is still more expensive than a comparable gasoline-powered car. Experts predicted that EV prices would reduce over the next few years as production costs came down, with EVs eventually becoming as affordable as internal combustion engine (ICE) vehicles.
However, average electric vehicle prices have actually increased in the past year, going up by more than 14% year-over-year to $66,000 in June. As electric vehicles were already out of reach for most consumers, even with available state and federal subsidies, this price increase is bound to have an impact on EV adoption. Next to insufficient charging infrastructure, high prices have been the most significant barrier to electric vehicle adoption.
On top of shelling out tens of thousands of dollars for the car, buyers also have to install private EV chargers at home, increasing the overall cost of going electric. With the cost of producing electric vehicles increasing in recent months, partly due to soaring battery mineral prices, the price of the average electric vehicle has increased.
A new Kelly Blue Book report has revealed that the average price for a brand new EV in June went up by 3.8% from May and 13.7% compared to last June. This brought the cost of a new EV up to more than $66,000, Kelly Blue Book states, pushing average EV prices over the industry average and into the luxury range. While the year-over-year increase is quite large, it is in line with price movements in the wider automotive market where average car prices increased by 12.7% to $48,043 in June.
However, there is such a huge variety of vehicle models in the traditional car market that the impact of the $18,000 increase cannot be compared to the EV industry, which is often in the premium and luxury segments. KBB also revealed that despite the disparity in price between electric cars and gasoline-powered vehicles, the total cost of owning both types of vehicles is remarkably close.
Tesla Inc. (NASDAQ: TSLA), currently the largest player in the electric vehicle space, increased the prices of its vehicles by almost 12% since last year. BMW increased its prices by 11.8%, Ford Motor raised EV prices by 8.4% and General Motors raised prices by 3.4%. With the global economy hit hard by inflation, it is no surprise that average EV costs have gone up.
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