One of the main obstacles to the mass adoption of electric vehicles is their price. The average price of an electric car reached an all-time high at $66,000 earlier this summer. This is disappointing, as the auto industry has previously promised that prices will come down as battery production becomes more efficient.
But even more disappointing is the rate at which prices of electric vehicles have risen relative to their gasoline counterparts. According to iSeeCars, which studied the market for used electric vehicles, prices for such vehicles increased by 54.3% in a year, while the price increase for cars with internal combustion engines was only 10.1%.
There are several factors behind this staggering rise in the price of electric vehicles. The global chip shortage has caused huge production problems in the industry and led to a drop in car sales in general. In addition, high gasoline prices have triggered a boom in demand for electric vehicles, which has led to a large increase in sales from dealers and, accordingly, to a sharp decrease in their stocks.
As experts found out, prices for electric vehicles increased sharply in January 2022 (by 54.1% compared to January 2021), due to high fuel prices. In March, price increases for both electric cars and conventional cars eased, but while conventional car prices continued to decline, electric car prices rose once more and continued to rise until the summer.
Interestingly, the two electric models that saw their price increase the most in a year are also the most affordable electric vehicles on the market: the Nissan Leaf and the Chevy Bolt EV. A used Leaf now sells for an average of $28,787, up 45% from last year. At the same time, the Leaf’s life cycle is coming to an end, and Nissan is considering the possibility of phasing out this model in the coming years. Meanwhile, the price of Bolt, which has been heavily discounted recently, is averaging $28,291, up 29.3% from 2021.
Tesla vehicles rose 19.2% on average, with the Model S up 27.5% to $83,078. The only EV to drop in price, according to iSeeCars, was the Porsche Taycan, which fell 3.5% to $138,033. a coveted name like Porsche.
Dealers are inflating prices on some new models, especially high-demand ones like the Ford F-150 Lightning, GMC Hummer EV and Kia EV6. This led to a large number of customer complaints, which forced automakers to take price stabilization measures. Many of the most popular models are already sold out this year. Tesla cars have risen in price by an average of 19.2%.
On a broader scale, electric vehicle prices are rising amid changing market conditions and rising raw material prices, in particular key materials needed for electric vehicle batteries. Battery prices have been declining for a long time, but some experts predict that a sharp increase in demand for battery materials over the next few years might lead to a 20% increase in costs.
But this price hike may not last long. There are a number of positive developments on the market that might lead to a stabilization of prices for electric vehicles. In the US, a law has been passed that includes subsidies for both new and used electric cars, which will stimulate demand. So, due to the high sales of new electric vehicles, used ones will gradually become cheaper.
