EV prices are sitting at record highs.
According to the latest data, EV prices keep soaring upwards, keeping them well out of reach of the average American. Electric vehicles claim to be the saviors of the automotive industry. While these cars have made significant inroads in recent years, pricing remains a major issue holding EVs back from truly breaking into the mass market.
According to sales data released by Kelly Blue Book, EV prices skyrocketed in November. This comes after manufacturers have been battling with supply issues, an ongoing semiconductor shortage, and an increase in the price of batteries. According to Kelly Blue Book, EV prices were up by 2% compared to October last year and 9% compared to November 2021.
The news comes at a time when demand is at an all-time high, and many manufacturers have admitted to struggling with vehicle supply due to global shortages of various parts.
These shortages have been plaguing the automotive industry, and just when we thought it was over, 2022 threw another curve ball. The average transaction amount for an EV is currently sitting at $65,041, placing these vehicles out of reach of the average American buyer.
The report states that EV prices are "well above the industry average and [aligned] more with luxury prices versus mainstream prices." The average new vehicle price is also at a historic high, with the November figure reaching $48,861. This reinforces the idea that gas cars are still much more affordable than EVs.
Kelly Blue Book has yet to publish brand-specific transaction data, but we know that models such as the Tesla Model 3 and Model S and Ford F-150 Lightning have seen significant price increases of late.
The current high inflation rates undoubtedly influence car prices, but increased demand, short supply, and skyrocketing raw material prices (think lithium) are the true cost drivers here. With high demand, there is little to disincentivize manufacturers from lowering their prices. Still, manufacturers are opening new plants, increasing output, and investing in semiconductor chip makers, which will eventually drive down costs.
For now, rental companies have started playing an interesting role in the switch to EVs, with people's first-ever experience being in a rental car.
The rental market will eventually shed some of its aging EV fleets, flooding the market with cheaper options.