One of the top hurdles to EV adoption in the US is the often touted issue that EVs simply cost more than similar gas-powered vehicles. But assuming you can get your hands on one, roughly two-dozen BEVs and PHEVs available for sale in the US this summer have a base manufacturer’s suggested retail price (MSRP) of less than $45,000.
Nine of these EVs have a base MSRP of less than $35,000 and another nine would have a net effective price below $30,000 when factoring in the applicable federal EV tax credit. And buyers in some states may qualify for further incentives including rebates or no sales tax, along with some utilities also providing rebates.
Now of course it is important to point out several things:
- The base MSRP does not include delivery fees or taxes.
- Many or most car and truck buyers will opt for various trim upgrades and options, bringing the the final price well above the base MSRP.
- Some of the prices listed are for the smaller battery pack versions of BEVs, some of which may not be available until months from now and/or may be in very low availability.
- Several of these EVs are seeing substantial ADMs (Additional Dealer Markups). One website, EV Dealer Markup Tracker, was set up to monitor these markups.
- The federal EV tax credit is just that, a tax credit that is applied when submitting your taxes. This can mean receiving the credit in as short as a few months to 16 months or more since the purchase date. And not all EV buyers will have a tax liability that exceeds the amount of the tax credit applicable to the EV they purchased. So in fact it doesn’t reduce the purchase price of a qualifying EV, but can provide a post-purchase tax benefit down the road.
- Several of these EVs are only available currently or in the near future for existing reservation holders. In other words, for many or most of these EVs you can’t simply walk into a dealer and buy one. Back in January I visited a Bay Area Ford dealer and wanted to check out the Mustang Mach-E. It was shortly before closing time and gentleman (the general manager I believe) greeting me as I got out of my Tesla and when I asked about seeing a Mach-E he laughed. He wasn’t being impolite, but he simply explained that his dealership would get about one Mach-E per week and each one was already allocated to a reservation holder.
- And some of these EVs may not be available in general for a few more months, or currently in your state, such as with the Hyundai IONIQ 5.
Extremely limited availability. Currently, 2022 IONIQ 5 is only sold at select Hyundai dealers in AZ, CA, CO, CT, FL, GA, IL, LA, MA, MD, ME, MO, NC, NJ, NM, NV, NY, OH, OK, OR, PA, TX, UT, VA, WA, and WI. Additional state availability coming soon. See your Hyundai dealer for availability details.Source: Hyundai.com
Cost Parity? No. Cost Competitive? Yes.
Before incentives, EVs can typically range from $5,000 to $20,000 more than comparable gas-powered vehicles. For example, the Kia Niro EV (BEV) has a base MSRP of $39,990 versus $24,690 for the Kia Niro regular hybrid — a difference of $15,300. But after factoring in federal, state, and utility incentives along with lower maintenance and fuel (gas versus electricity) costs, depending on how long you own the Niro and how much you drive, it might actually make up the difference.
But the larger point is that most people who are high EV intender buyers (those with high interest and preference to buy an EV), are more comparing EVs and their price range, battery range, charging capabilities, and other factors to each other rather than gas-powered vehicles. And in that vein, EVs are not out of the price norm in general. New-vehicle average transaction prices (ATPs) increased to $47,148 in May 2022, according to data released in early June by Kelley Blue Book, a Cox Automotive company.
Do electric vehicles need to come down in price to make them more attractive and affordable to mainstream US households? Absolutely. But with less than 1% of vehicles on the road in the US being electric and more than 10% of households with annual income of $200,000 or more — affordability isn’t yet what’s holding greater EV sales back. Rather, we need more EV and EV charging education and awareness, improved EV charging experience, more EV models and increased actual availability.
In the meantime, if you can afford to purchase or lease a car for up to about $50,000, there are about two dozen EVs to choose from — but you better get a reservation soon.