People in the market for a new electric vehicle may be looking at a bargain of sorts, particularly if they aim to get a new Tesla.
The average U.S. price of a new EV in January was $55,353, down 10.8% from January 2023, Kelley Blue Book said Tuesday. That is 3.2% higher, however, than the December average of $53,611, which was the lowest average price for an electric car in the past 12 months.
"EV prices have come down significantly in the U.S. in the past year, led by price cuts at Tesla," said Mark Strand, a senior director at Cox Automotive, which owns Kelley Blue Book.
The January price drop for EVs comes as the average price of a new vehicle in the U.S., electric or otherwise, dropped to $47,401 in January - down 2.6% from December 2023 and down 3.5% as compared with January 2023.
Prices for the Tesla Model Y, the industry's EV volume leader, have tumbled about 21% in the past year, falling to less than $50,000 in January from nearly $63,000 in January 2023, Kelley Blue Book said.
Tesla $(TSLA)$ Chief Executive Elon Musk on Sunday took to his platform X, formerly Twitter, to amplify a fresh $1,000 discount on Tesla Model Ys bought in February, calling it an "essential quandary" of manufacturing.
Investors have worried about the continued price cuts at Tesla, which in January issued a 2024 guidance that was faulted as too vague and warned investors that it may grow slower this year.
Tesla's stock has dropped 26% so far this year, contrasting with gains of around 3% for the S&P 500 index. SPX
Another result of higher inventory and slowing EV sales is an increase in the discounts on certain EVs, Kelley Blue Book said. For example, the ID.4, Volkswagen's (XE:VOW) (XE:VOW3) electric SUV, previously had an average incentive package equal to about 6% of its average transaction price - but last month's incentives jumped to nearly 17% of the average transaction price, according to Kelley Blue Book.