Sticker prices on electric vehicles (EVs) continued to trend downward in 2023 toward price parity with gas cars, as led by price cuts from market leader Tesla.
In what many termed an automotive “price war” early last year, Tesla lowered its prices significantly across its entire vehicle lineup, putting substantial pressure on the rest of the industry. A Cox Automotive report shared in a webcast on Monday shows how EV prices gradually dropped throughout last year following Tesla’s price cuts, effectively inching the market closer to reaching price parity with internal combustion engine (ICE) vehicles.
The data shows that the average sticker price of a Tesla dropped throughout the year to reach $50,051 in December. This figure was not far from the $48,759 considered to be the average price of an ICE vehicle in the same month
Following Tesla’s lead, the rest of the auto industry saw an average EV sticker price of $50,798, showing a similar downward trend throughout the year. Additionally, the overall average price for an EV showed a drop from $52,362 in November.
You can see a graph of average EV transaction prices below, including figures over time for Tesla, EVs overall, and ICE vehicles.
Cox points to Tesla’s price cuts, incentives, and increased options for affordable EVs hitting the market as reasons for the downward trend.
Still, many automakers are facing much higher inventory levels on EVs than on ICE vehicles, increasing 92 percent as dealers carried an average of 113 days’ supply to end the year. Comparatively, the ICE inventory average landed at just a 69 days’ supply in December, which was slightly up from much of the rest of the year.
Despite some automakers facing high inventory levels, others like Tesla and Rivian are not included in the data because their direct-to-consumer models keep their inventory levels very low.