The past 12 months have been wild for electric vehicle prices as Tesla disrupted the market once again with its generous price cuts.
A study from Kelley Blue Book tracking monthly average transaction prices (ATPs) and how they compare to the previous month and the same month from a year prior showed the extent of these price cuts and how other automakers have reacted to them.
Electric vehicle average transaction prices (ATP) were down nearly 18% year over year in July, to $53,469 from $65,108 one year ago, led by price cuts at market leader Tesla. The average ATP for EVs in July was down from $53,682 in June and down from more than $61,000 in January.
EV ATPs are down more than 19% from their recent peak of more than $66,000 just a little more than a year ago in June 2022.
KBB noted the price declines in the EV segment have mirrored inventory increases experienced by some automakers. At the end of July, the EV segment days' supply was near 100 days, while industry days' supply stood at 54 (data excluding Tesla).
Tesla's average transaction price in July was $54,660, representing a massive 19.9% decrease from July 2022, when the brand's ATP was $68,215, and a 0.8% decrease from June 2023's $55,105. The July ATP was Tesla's lowest since April 2020, while the year-over-year ATP reduction was the largest among the automakers in the study.
According to KBB estimates, the lower prices at Tesla are likely helping with sales volume, as the automaker reached a record high volume of 59,813 units in July.
"The year-over-year decline of EV ATPs has been led by Tesla slashing prices on its popular models," said Rebecca Rydzewski, research manager at Cox Automotive, the parent company of KBB.
"Tesla prices are down nearly 20% versus a year ago, and other EV models, such as the Ford F-150 Lightning, have been following Tesla's lead. While automakers report losing money on electric vehicles, they continue to aggressively pursue EV growth strategies," she added.
The study also showed incentives for EVs in July were 6.7% of ATP, or $3,755. That's almost double the average incentive for all types of vehicles, which stood at $2,148 in July, the highest point in a year.
Despite the big reduction in EV ATPs, the ATP for a new vehicle in the U.S.---all vehicle types combined---was virtually flat (up 0.4%) compared to July 2022 at $48,334, the smallest increase in a decade.
Abby Andrews