In 2023, Tesla played a significant role in narrowing the price gap between electric vehicles (EVs) and internal combustion engine (ICE) cars, moving the EV market toward price competitiveness, according to Cox Automotive.

In 2023, Tesla played a significant role in narrowing the price gap between electric vehicles (EVs) and internal combustion engine (ICE) cars, moving the EV market toward price competitiveness, according to Cox Automotive.

In 2023, electric vehicle (EV) sticker prices continued their descent toward aligning with gasoline car prices, largely steered by Tesla's proactive price reductions. Termed an automotive "price war," Tesla's substantial price slashes across its entire vehicle range early in the year exerted considerable pressure on the industry. According to a Cox Automotive report presented in a recent webcast, these price cuts by Tesla initiated a gradual decline in EV prices over the course of the year, edging the market closer to achieving price parity with internal combustion engine (ICE) vehicles.

The data illustrates Tesla's average sticker price steadily decreasing throughout the year, reaching $50,051 by December. This amount stood in close proximity to the $48,759 average price of an ICE vehicle in the same month.

Echoing Tesla's actions, the wider automotive sector witnessed an average EV sticker price of $50,798, reflecting a similar downward trajectory throughout the year. Moreover, the overall average price for an EV demonstrated a decline from $52,362 in November.

Displayed below is a graph depicting the average transaction prices of EVs over time, illustrating the trend for Tesla, EVs collectively, and ICE vehicles.

 

In 2023, the trajectory of electric vehicle (EV) sticker prices continued a downward trend, moving closer to achieving price parity with gas-powered cars. This shift was largely driven by Tesla's aggressive price reductions, sparking what many termed an automotive "price war." Throughout the year, Tesla slashed prices significantly across its entire vehicle range, applying immense pressure on the wider industry. According to a Cox Automotive report highlighted in a recent webcast, this move by Tesla set off a gradual decline in EV prices, pushing the market nearer to aligning with internal combustion engine (ICE) vehicle costs.

The data indicates a consistent decline in the average sticker price of a Tesla throughout the year, reaching $50,051 by December—a figure not far from the $48,759 average price of an ICE vehicle in the same period.

Following Tesla's lead, the broader auto industry experienced a similar downward trajectory in average EV sticker prices, settling at $50,798 by year-end. Moreover, the overall average price for an EV dropped from $52,362 in November.

Cox attributes this downward trend in EV prices to Tesla's price adjustments, incentives, and the introduction of more affordable EV options in the market.

However, while some automakers grapple with elevated inventory levels of EVs compared to ICE vehicles—an increase of 92% with dealers carrying an average of 113 days' supply by year-end—companies like Tesla and Rivian aren't included in this data due to their direct-to-consumer models, which maintain significantly lower inventory levels.

Although Cox intends to release a comprehensive EV report later this week, the initial insights suggest a shifting landscape in EV pricing dynamics. You can access the complete webcast replay here or view the full set of presentation slides here for further details until the detailed report becomes available.

 

--------The article excerpted from TESLARATI.

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