Electric vehicles (EVs) generally cost more than conventional gasoline-powered automobiles. But the pricing gap is shrinking.
According to the latest data from Kelley Blue Book, the average price paid for a new electric vehicle was an estimated $56,910, which is basically unchanged from a year ago. For comparison, gas-powered cars averaged $48,907, which is up 1.2% year over year. Tesla, still the top player in the EV space, saw its average transaction price dip to $54,989, down 5.7% from last year.
Pricing for new electric cars starts at $29,280, including destination charge, for the cheapest electric car, the 2025 Nissan Leaf, and rises to over $100,000 for a luxury EV like the 2025 Mercedes-Benz EQS SUV (starting at $106,400, including destination charges).
In the quarter, overall sales of EVs were lower by 6.3% over last year in the same timeframe.
“Lower EV sales last quarter underscore the market’s ongoing challenges, as growth in the auto business ebbs and flows on consumer demand,” said Stephanie Valdez Streaty, senior analyst at Cox Automotive, the parent company of Kelley Blue Book. “The year-over-year decline in Q2 was only the third decline on record, and a sign of a more mature market. The increase from Q1 may well be the start of a rush ahead of the federal incentive phase-out, offering a short-term boost in an otherwise uncertain landscape. With government-backed incentives set to end in September and economic pressures mounting, the second half of the year will be a critical test of EV demand. Q3 will likely be a record, followed by a collapse in Q4, as the electric vehicle market adjusts to its new reality.”
EV Tax Incentives Going Away
If you’re thinking of going electric, don’t wait too long. The federal government offers up to $7,500 in electric car tax credits for qualifying new EVs, and up to $4,000 for eligible used ones. Leasing? You might still benefit from the full credit on new vehicles, depending on the dealership. These credits help narrow the price gap between EVs and gas-powered cars. However, here’s the catch: Those credits disappear on Sept. 30. Lawmakers passed a new spending bill that eliminates electric car tax credits. Additionally, the now-in-effect tariffs on imported vehicles and parts could drive up prices on all cars, including EVs.
If you’re considering an electric vehicle, acting sooner could save you thousands.
Fully electric cars run on electricity and do not need gasoline, regular oil changes, or other maintenance that gas cars require. Typically, fuel costs more than electricity, which is another money-saver for people who drive electric vehicles.
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