Although EV prices have decreased in 2023, anything might happen. Despite a modest hike in March, Tesla suddenly reduced pricing once more.
According to Kelley Blue Book’s (KBB) most recent report on US car market pricing, the average cost of a new EV increased by merely $313 in March of 2023 when compared with February 2023. The average cost of a vehicle for the month, according to KBB, is $58,940, which is significantly more than the average transaction price for a new car, which is $48,008.
In 2022, the cost of electric vehicles reached its peak, with Tesla frequently boosting prices as CEO Elon Musk expressed concerns about global unrest, inflation, and a probable recession. Despite this, the US-based EV manufacturer dropped prices at the close of the year and again at the beginning of 2023. While Tesla has begun to slightly increase pricing again on a few models over the past several months, it has also started to implement additional price reductions, particularly latest of which took $5,000 off all of its models.
Why did prices drop significantly in March if Tesla is lowering prices even further and sells the majority of EVs in the US?
In April 2023, Tesla’s most recent $5,000 price reduction went into effect. Although Tesla’s pricing reductions this year have decreased the average selling price of an EV and prompted some competitors to swiftly follow suit, there is another element at work. The average is likely to increase a little bit as more startups and legacy automakers sell more EVs each month, most likely at MSRP or possibly marked up.
According to a research from KBB cited by Green Car Congress, more expensive companies like Mercedes, Rivian, Lucid, among others have increased their EV sales, which is starting to slightly counterbalance Tesla’s affordable options.
According to a recent KBB analysis, March marked the first time in nearly two years that average pricing in the US car industry as a whole fell below MSRP. Once more, this is probably certainly caused, at least in part, by Tesla’s industry-wide price decreases. Automobile sales have decreased marginally since last March, when they were typically $1,000 above the MSRP.
According to the research, the average cost of a non-luxury automobile in the US in March 2023 was slightly over $44,000, down $505 from February 2023.
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