According to the latest US automotive market pricing report by Kelley Blue Book (KBB), the average price paid for a new EV was up just $313 in March 2023 as compared to February 2023. KBB puts the average price for the month at $58,940, which is much higher than the average new-car transaction price of $48,008.
The price of electric cars was at its highest in 2022, with Tesla raising prices often as CEO Elon Musk voiced fears of global turmoil, inflation, and a potential recession. That said, the US EV maker ended the year with price cuts and opened 2023 with even larger reductions. Over the last few months, while Tesla has started to raise prices slightly back up on a few models, it has also initiated further price cuts, the most recent of which knocked $5,000 off all its models.
If Tesla is cutting prices even further, and it sells the lion's share of EVs in the US, why did prices come down slightly in March?
Tesla's most recent, $5,000 price cut just took effect in April 2023. While Tesla's price cuts have pushed the average EV selling price down this year, and forced some rivals to follow suit, there's another factor at play. As more legacy automakers and startups sell a larger number of EVs each month, likely at MSRP or even marked up, the average stands to rise slightly.
KBB's recent report emphasizes that the US automotive market as a whole finally saw average prices fall below MSRP in March, which is the first time it's happened in almost two years. Again, this is almost certainly due at least in part to Tesla's price cuts impacting the entire industry. Last March, cars were selling at an average of $1,000 over MSRP, and now they're selling at prices slightly below.
The report also shows that the average price paid in March 2023 for a non-luxury vehicle in the US came in at just over $44,000, which is a $505 drop from February 2023. Meanwhile, consumers are still paying above MSRP for new luxury cars. While not all EVs are considered luxury cars, many are, and those that aren't may still be priced more like luxury cars than their mainstream rivals.