Tesla lowers its prices more than other EV makers
Tesla lowered its prices 9% in July — versus 4% for all EVs — to move inventory ahead of the $7,500 tax credit sunset.
US electric vehicle sales just had their second-best month ever in July, selling more than 130,000 vehicles as manufacturers lowered their prices to move inventory ahead of the federal government’s elimination of the $7,500 tax credit at the end of September. The average EV transaction price declined to $55,689, down 4.2% compared with a year ago, according to new data from Kelley Blue Book. The average incentive package for an EV was a record 17.5% of the average transaction price.
Tesla led the charge with numerous incentives that dropped its average transaction price 9.1% to $52,949 in July. Nevertheless, Tesla sales were down year over year.
Tesla, which makes only EVs, has a lot to lose from the demise of the federal credit. Depending on how much the company lowers its sticker prices, the disappearance of the tax credit could severely affect its finances. In combination with the rollback of regulatory credits, JPMorgan estimates the changes will jeopardize more than half its profits. So it makes sense that EV makers would lower their prices while they can still get the $7,500 reimbursement.
Overall vehicle prices (including EVs and gas cars) rose slightly in July, up 1.5% compared with a year earlier.
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