EVs cost 37% more on average. We're tracking the average price of electric cars, and the trend is not looking good.
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.
In August of 2022, the average transaction price for a new car (of any powertrain) was $48,301, according to Kelley Blue Book. At the same time, the average electric car price was $66,524. Although the average EV sells for 37% 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:
This information could be interpreted in at least two different ways. You could either conclude that the most popular EVs are more affordable than the market average, or you could see these numbers through the eyes of someone who’s browsed EV listings for years. These prices DO NOT include the all-to-common dealer markups. The Hyundai IONIQ 5 starts at $40k for the base trim, but there’s not a single one available for under $45,000 in my region. The story is the same for the Kia EV6 and Ford Mustang Mach-E. Good luck finding a used Tesla for anything less than the original sticker price.
In January 2020, the average electric car price was $54,668, or 42% higher than the overall market average. In 2022, the average cost of an EV is nearly $67,000, or about 37% higher than the overall auto market. Would you call that an improvement? Certainly not. All new cars are getting more expensive, whether electric or not. Here’s how the average cost of an electric car has changed monthly since January 2020.
Sadly, right now price increases are here to stay. Why are EVs so expensive? Batteries aren’t cheap. The average price of a lithium-ion battery pack dropped 90% from 2010 to 2020. One kilowatt-hour of lithium-ion battery storage cost $1,200 in 2010, but prices had fallen to $384 per kWh in 2015, and down to $137 per kWh in 2020. The long-awaited $100/kWh milestone that would bring affordable EVs to all was just around the corner when the pandemic hit.
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