Tesla's reduced prices are steering the electric vehicle market towards greater affordability, with far-reaching implications.
Once again, Tesla has made a move to reduce the prices of its vehicles, further expanding the accessibility of electric cars. This contributed to an overall drop in new vehicle transaction prices for September, a trend largely attributed to Tesla's influence. This adjustment allows consumers to access top-tier electric vehicles at more affordable prices.
Compared to September 2022, electric vehicle prices have decreased by over 22%, now averaging at $50,683 as opposed to the previous $65,295.
While luxury automakers Audi, Mercedes-Benz, and Porsche all marked September 2023 with increases in pricing compared to the same month a year prior, Tesla helped offset these increases with cuts of its own in the United States.
Tesla spearheaded the EV market by implementing price reductions, setting off a wider trend of decreasing EV prices. The notable 22% year-over-year decline remains a significant factor, but Tesla is also exerting pressure on prices over shorter intervals. For instance, they slashed prices by nearly $2,000 between August and September alone.
Simultaneously, EV sales are on the rise, with EV supply dropping to 97 days at the start of October. This is a notable decrease from the peak of 2023, which reached 111 days in early July.
Stephanie Valdez-Streaty, Director of Industry Insights at Cox Automotive, commented:
“EV sales continue to grow in the U.S., partly due to strong supply and more choice. At last check, we had 15 new EV models for sale that were not available a year earlier. Better choices and more options are helping push prices lower and drive higher sales.”
In September, Tesla saw a 5.5 percent reduction in transaction prices compared to August, and a substantial 24.7 percent drop year-over-year. This counteracted price increases observed in other major automakers like BMW (4.4%), Daimler (11.5%), Ford (4.9%), GM (1%), Hyundai (2.8%), Stellantis (5.6%), and Volkswagen (4%).
Across the entire electric vehicle industry, there was a 2.9 percent decrease in prices from August to September, and a notable 22.4 percent decline from September 2022 to September 2023.
Tesla's price adjustments have garnered both positive and negative reactions from investors and analysts. While they may impact margins and potentially lead to bearish sentiments on Wall Street, consumers are benefiting from the more affordable prices, making electric vehicles accessible to a wider range of buyers.
Furthermore, with anticipated changes to the EV tax credit under the Inflation Reduction Act, there are even more advantages on the horizon as a result of these price adjustments.
--------This article is partly excerpted from Reuters.
