February 2024 Update: The average transaction price for an EV dropped again last month. Check out the details below.

Car buying is the second biggest expense most consumers will ever make, and more drivers are getting squeezed into $1,000/month car payments. With an EV, you can save hundreds of dollars per month in fuel costs, but the upfront cost of getting into an electric car is substantial. Here’s the average price of an electric car today, and how much prices have increased over the past three years.

The Average Price of an Electric Car Is 17% Higher

As of the most recent data from January, the average transaction price for a new car (of any powertrain) was $47,401 according to Kelley Blue Book. That’s down 2.6% lower than the month prior. In January 2024, the average new electric car price was $55,353.

As we begin 2024, the average price paid for a new EV is 17% higher than the overall new car market average. In 2023, electric car prices averaged 8% more than the overall market average. In 2022, EV prices averaged more than 15% higher than the overall market.

EV prices appear to have stabilized, and remain a premium segment in most cases. It’s also true that overall new car prices are much higher than historical norms, regardless of powertrain.

Over the past year, the average price paid for a new EV has declined by 21%. According to KBB, new EV pricing peaked in June 2022 at $66,997, and has fallen by $11,597 since.

Why Are EV Prices Dropping?

Why are EV prices dropping? Tesla keeps slashing prices, in turn launching an all-out price war with the competition. Remember, Tesla continues to make up 50% of all EV market share in America. $55,000 is not cheap, of course. An abundance of luxury options continues to keep the average price of an electric car well above gas counterparts.

On top of that, Ford and GM have been steadily increasing prices for their electric trucks. E-truck prices are generally expensive (see ALL electric truck prices here). The new Chevrolet Silverado EV is not going to be as affordable as originally claimed. Most electric trucks cost over $70,000 once trim and spec availability is considered.

Although the average EV sells for 17% more than gas-powered models, here’s a breakdown of the starting MSRP for the top 10 electric car models on sale right now. As you can see, not all EVs are quite this expensive:

• Tesla Model Y ($47,740)
• Tesla Model 3 ($40,240)
• Ford Mustang Mach-E ($46,995)
• Tesla Model S ($74,990)
• Chevrolet Bolt ($27,495)
• Tesla Model X ($79,990)
• Hyundai IONIQ 5 ($41,450)
• Kia EV6 ($42,600)
• Volkswagen ID.4 ($37,495)
• Ford F-150 Lightning ($49,995)

The average starting price for the top 10 best-selling electric cars in America is $48,899, which is 10% lower than six months prior.

EV Price Trends

In January 2020, the average electric car price was $54,668, or 42% higher than the overall market average. In 2023, the average cost of a new EV was $53,376 or about 10% higher than the overall new car market. That’s a lot better than where the EV marker was in early 2022, when EV prices averaged north of $65,000. Here’s how the average cost of an electric car has changed monthly from January 2020 to 2024. 

We track EV market share monthly. Here’s where things stand today.

When Will Electric Car Prices Go Down?

Simply put, EV prices are most likely to go down once they become truly mainstream. The great news is that many analysts agree that we reached that point in 2023. With EV market share climbing to a new record of 8.1% of all new vehicle sales in America in 2023, the EV revolution is happening slowly but surely.

However, there’s a big, expensive elephant in the room that’s blocking the path to much higher EV adoption: high prices. Lithium prices have dropped quickly in 2023 following a big spike last year. Generous EV tax credits have returned for Tesla models – the best selling EVs in the nation. Why aren’t prices dropping right now? Demand for new EVs remains very high. Dealers sell their electric inventory much faster than ICE models, and are rarely compelled to cut prices.

In order to change that, automakers will need to make more EVs, so that we can finally get some sitting on the lot for more than a few days. That could finally happen later this year with the arrival of many new mainstream electric models.

Thinking of Buying?

Regardless of whether you think an EV might be in your future, CarEdge Car Search is the best way to shop online with more transparent pricing, and auto industry insights dealers don’t want you to see. Check it out today!