Massive discounts and new lower-priced models are making electric vehicles more affordable, helping draw in buyers. According to the latest JD Power EV Index data, interest in EVs hit a new yearly high in July, with over a quarter of shoppers “very likely” to go electric for their next vehicle.
The latest forecast from JD Power and GlobalData projects that new vehicle sales will reach over 1.43 million in August 2024, a 4.2% increase from last year.
Comparing the sales volume without adjusting for the number of sales days amounts to 8.1% growth year-over-year.
A big reason behind the growth is lower prices. Automakers have introduced aggressive discounts and lower-priced models, driving the average transaction price down 4.1% ($1,895) to $44,039.
The average incentive per vehicle is expected to reach $3,035, up $1,132 from August 2023. With federal, state, and local discounts totaling over $10,000, many electric vehicle prices are at or above parity with their gas-powered alternatives.
The JD Power EV Index, which tracks the parity of EVs with gas-powered vehicles, hit a record high in July, scoring 56 on a 100-point scale. July was the fifth straight month that the EV index rose.
Interest in EVs continues to climb
“One factor—interest—reached a high for the year with 28% of new-vehicle shoppers saying they are ‘very likely’ to consider a battery electric vehicle for their next purchase,” according to Elizabeth Krear, JD Power’s vice president of electric vehicle practice.
Krear explained, “Incentives have helped align prices in popular compact and midsize mass market segments, making them more affordable.”
Automakers are slapping massive discounts on top of federal and state incentives, making them more affordable than ever.
With the incentives combined, several EVs are selling for over $10,000 off MSRP. According to Motor Intelligence, the Kia EV9 sold with an average discount of over $18,000 in June.
Subaru’s Solterra was the most discounted car, electric or gas, selling for 12% off MSRP, according to Consumer Reports.
After introducing a massive new discount this month, the Acura ZDX has up to nearly $30,000 in potential savings. The Honda Prologue SUV is up to $14,250 off with a new Labor Day deal.
EV retail sales held steady at 9.2% of the market for the second consecutive quarter. Krear added, “Especially noteworthy is the satisfaction experienced by Ford and Rivian owners now having access to the Tesla charging network.”
As more affordable models hit the market and the infrastructure continues developing in the US, interest in EVs is expected to continue climbing.