Electric vehicles are seeing huge discounts right now, but those new lower prices are still not enough to get folks to, y’know, buy them. Now, an ever-more-bloated EV inventory is pushing automakers and dealers to slash prices even further. Five-figure price discounts are no longer out of the question.
On average, automakers discounted their EVs about $6,000 per unit in the first quarter of 2024, according to a Cox Automotive study reported by Automotive News. Automakers and dealers alike are offering these high-ass discounts for the simple fact that people do not want to spend a huge premium on electric vehicles, and they’re now piling up on dealer lots.
Some automakers are going well above and beyond that $6,000 average, though. Nissan is offering nearly $16,000 off its Aryia electric crossover. That works out to nearly a third of its MSRP right off the bat, and that doesn’t even include tax breaks or utility rebates for buyers. Mercedes-Benz is also making big cuts, according to AutoNews. Its EQS SUV currently getting nearly $20,000 cash on the hood, cutting the price to a tick under $105,000. That works out to a 19 percent discount.
Here’s more from Automotive News on how massive EV inventory is impacting car dealers:
As of April 1, EVs were sitting on dealership lots for an average of 119 days. While that’s fallen from a peak of 169 days in mid-February — helped by the discounts — it’s still a lot higher than the 73-day supply average of gasoline-powered vehicles. Days’ supply — or the average number of days a vehicle stays in dealer inventory before selling — can include vehicles in progress, in transit and on dealership lots.
”Consumers … might want to wait” to buy EVs, said Stephanie Valdez Streaty, director of industry insights at Cox Automotive. “It’s a huge investment. Affordability is an issue.”
But some EVs that were out of the price range for many consumers are now among the more affordable options in the new-vehicle market. With incentives, 11 EV nameplates cost less than the first-quarter industrywide average transaction price. The Ariya sold for about $35,500, according to Cox Automotive data, while the Nissan Leaf is less than $28,000. The Hyundai Ioniq 6 is $36,506.
Tesla and Ford cut sticker prices on EVs in addition to discounting. The Tesla Model 3 costs $40,547 while the Model Y costs $43,238, with modest incentives on average. The Ford Mustang Mach-E is $44,910 on average with incentives, according to Cox Automotive data. Retail prices don’t include shipping.
This is all happening for one simple fact: the demand for EVs is cooling alongside sales. Electric vehicles made up 7.3 percent of new vehicle sales in the first quarter of 2024, AutoNews reports. Sales volume rose 2.6 percent from a year earlier, which is the right direction, but it’s a much slower rate of growth than in previous quarters. EV volume jumped 46 percent year over year in the first quarter of 2023, and 81 percent in the first quarter of 2022. This is telling us the early-adopter era of EVs is pretty much over, and the next batch of consumers isn’t so sure about the tech. From Automotive News:
“As we move into this next wave of adoption, it’s getting more challenging,” Valdez Streaty said. “That’s why inventories are building up.”
EV supply started last year at 59 days, a relatively typical turn time for many models, no matter the fuel type. Inventory, however, has swelled since then, crossing 100 days last May and peaking at 169 days in February. Gasoline vehicle inventory also reached a high in February, but its 82 days was less than half the average EV supply.
Incentives and price cuts have helped sell EVs over the last few months. Ford’s supply fell to 140 days in March from 314 in February after it cut the Mustang Mach-E’s price by up to $8,100 in February.
Nissan’s EV supply dropped to 94 days in March from 159 days in February. Dealers told Automotive News that employee discounts on the Ariya boosted sales.
What all of this is telling me is that electric vehicles are just far too expensive for customers. Right now, folks just do not see the value in buying an EV when its internal combustion-powered counterpart is almost always cheaper. Maybe that’ll change, but prices are going to have to come way down.
If you want to learn more about what automakers and dealers are, well, dealing with in terms of EVs, head over to Automotive News for the full story.