- The “EV premium” has nosedived from 30% to under 10%, as EVs give ICE rivals a run for their money.
- November’s new EVs averaged $52,345, only 8.5% above traditional vehicles at $48,247, attracting more cost-conscious mass-market buyers.
- Record November incentives are closing the gap with traditional vehicles and setting the stage for EVs to potentially outshine the competition.
US EVs are challenging the status quo, slashing prices and leaving traditional rivals in the dust
A recent industry update by Cox Automotive has revealed that EV price parity is approaching, with incentive levels being seen to significantly outpace the industry average. Throughout November, EV incentives hit their 2023 peak at 8.9% of the Average Transaction Price (ATP), a notable contrast to the less than 2% seen just a year ago. Thanks to discounts and an above-average inventory, electric vehicle transaction prices last month were only 8.5% higher than the industry’s average price of $48,247.
What’s more, the “EV premium” has undergone a significant shift, plummeting from over 30% to less than 10%. The landscape is changing swiftly, and EVs are emerging as serious contenders in the market. The days of a substantial price difference seem to be fading, indicating a rapid evolution in the competitiveness of electrification.
Stephanie Valdez-Streaty, Director of Strategic Planning at Cox Automotive, said:
“In recent months, price parity between EVs and ICE has almost seemed possible. It is a complicated measure with plenty of variables, but newer products and higher discounts have brought down average EV prices, even before potential tax incentives.”
The total cost of ownership (TCO) for electric cars is making them as, if not more, affordable than their ICE counterparts in the long run. Though early adopters considered TCO, most buyers primarily focus on the upfront cost. Now, with electric car prices becoming comparable, mass-market consumers are starting to seriously consider the practical and financial benefits of making the switch. The playing field is levelling, and affordability is becoming a key factor in the decision-making process.
For those with an eye on the long-term, operational costs continue to stand out as a highly compelling factor. In the realm of costs, electricity takes the lead per mile, proving to be more budget-friendly than petrol or diesel. EVs shine in efficiency, sipping less energy and contributing to substantial savings. The added perk is the steady and often more predictable nature of electricity prices, providing a smoother ride when it comes to fuel expenses for EV owners.
EVs keep it simple, leaving behind the outdated components of traditional ICE vehicles. This no-nonsense approach slashes maintenance needs and costs. What’s more, cutting-edge technology, especially in the battery realm, has significantly increased the lifespan of EVs and their components. And if that wasn’t reassuring enough, many manufacturers throw in warranties for a specified number of years or miles.
The latest insights from Cox Automotive highlight the remarkable transformation being seen across the dynamics of the US automotive landscape. With incentives outpacing the industry average and the “EV premium” dropping drastically, EVs are emerging as serious players. The once significant price difference is fading fast, making the practical and financial benefits of EV ownership increasingly apparent. Beyond the upfront cost, operational savings, energy efficiency, and tech advancements are reshaping the landscape. No spreadsheet required – the journey ahead promises not just a shift in transportation but a smart, efficient, and cost-effective future on the horizon.