According to JD Power's latest report, about half of the consumers in the US new-car market may be able to find a new electric vehicle this year that works for them. In other words, if you want a new EV, there's likely something on the market today that will suit you.
JD Power notes that many interested buyers in 2023 should be able to secure an EV they can afford. Moreover, the vehicle should also be viable for the consumer thanks to its size, and the options now come from a variety of brands. The company says that by the end of the year, as additional brands bring compelling and affordable electric models to market, about 50% of buyers should be able to get into a new EV that checks the right boxes.
The price of EVs is coming down, and that has become especially true this year after Tesla cut its prices significantly, which caused a sort of EV price war. Moreover, larger and more practical electric vehicles are becoming available, and the driving range is growing.
Vice president of J.D. Power's EV practice Elizabeth Krear told Automotive News that price is very important. She added that as soon as the price comes down, there's an immediate increase in interest.
At the beginning of 2023, buyers had to pay an average of 31% more for an EV compared to a similar gas car. The discrepancy has now dropped to 24%, though some electric cars have seen larger discounts than others, and some have already reached price parity with gas-powered rivals. JD Power says the average EV transaction price dropped 7.5% in the US from January to March 2023.
On top of EV price cuts, there are also new incentives and tax credits, not only from the US federal government, but also from local sources. Now that many EVs are selling at cheaper prices, they're becoming eligible for incentives they may have previously missed out on.
Chevrolet is selling its Bolt EV and Bolt EUV at ridiculously low prices. In fact, the 2023 Bolt, which is arguably much improved since it first arrived for the 2017 model year, is now about $10,000 cheaper than it was at its debut. When factoring in inflation, the Tesla Model 3 is at its lowest price since it launched. Meanwhile, the most popular EV in the US, the Tesla Model Y, has seen some of the most notable price reductions in the industry this year.
While a drop in prices is sure to entice more people to buy an EV, the expansion of options is the other point JD Power focuses on. Some people are picky, they know what they want, and they're not going to invest in something they have to "settle on." With more brands introducing EVs, loyal buyers now have options. EVs also come in almost all vehicle styles now, though it wasn't long ago that an electric pickup truck or an electric three-row SUV wasn't even an option.
With all of this said, JD Power predicts that only about one in 10 car shoppers will actually buy a new EV by the end of 2023. However, the number stands to grow much more quickly going forward.