There are a lot of myths about buying electric cars these days. Many people assume that because Tesla has established a no-haggle online sales policy, that applies to all other electric cars as well. We all hoped electric cars meant the end of the haggling and mind games that dealers are famous for — tactics that most buyers say they loathe.
There are always some people who are willing to pay stupid money for a car in order to be the first in their neighborhood or at the country club to own one. But for most of us, paying sticker price or higher is something we have been trained never to do. Now it seems there is good news for those who want an electric car and a good deal.
CNN reported this week that many dealers are starting to offer discounts on electric cars as inventories build now that full production has been achieved following the supply chain issues that plagued the industry during and after the Covid 19 pandemic. Joseph Yoon, consumer insights analyst at Edmunds, told CNN that automakers find themselves having to appeal to more mainstream consumers who are less interested in being early adopters and more interested in getting a good deal.
Pat Ryan, CEO of car shopping app CoPilot, added this surprising bit of news. Hybrid models, pioneered by Toyota 30 years ago, are now trusted technology and are attracting more interest from consumers than electric cars. They are selling for more than their sticker price and are moving quickly off dealer lots, according to data from Edmunds. “The adoption curve for hybrids is much further along,” Ryan said.
In September 2022, electric cars purchased in the United States, excluding Teslas, sold for about $1,500 over sticker price. One year later, those same electric cars sold for about $2,000 under sticker price, according to Edmunds. That’s a much bigger change than for the industry overall. The average new vehicle in America sold for about $900 under its sticker price in September.
Tesla has discounted its electric cars aggressively in 2023. The base price for a Tesla Model 3 is 17% lower now than it was at the beginning of the year. That has put pressure on other manufacturers and their dealers to adjust their prices as well. High interest rates are a factor, too. Many of those acres of cars you see sitting on dealer lots are financed. The longer they sit, the more dealers have to pay in interest, which generates pressure to move them off the lot and into someone’s driveway.
Some of the most popular EVs are now selling for hundreds or even thousands of dollars below sticker price in order to increase demand and manufacturers are offering incentives to dealers as well. According to Business Insider, here are 20 electric cars that are selling for below MSRP today listed in alphabetical order. The list does not include sales of Tesla, Rivian, or Lucid EVs, as those companies do not share their sales data publicly.
Audi e-tron GT
Average sticker price: $118,777
Average transaction price: $111,542
Average discount: 6.1% or $7,235
Average sticker price: $64,598
Average transaction price: $62,353
Average discount: 3.5% or $2,245
Ford F-150 Lightning
Average sticker price: $78,116
Average transaction price: $76,725
Average discount: 1.8% or $1,391
Ford Mustang Mach-E
Average sticker price: $56,895
Average transaction price: $55,909
Average discount: 1.7% or $986
Average sticker price: $66,896
Average transaction price: $65,046
Average discount: 2.8% or $1,850
Hyundai Ioniq 5
Average sticker price: $53,879
Average transaction price: $52,993
Average discount: 1.6% or $886
Hyundai Ioniq 6
Average sticker price: $52,049
Average transaction price: $51,465
Average discount: 1.1% or $584
Hyundai Kona Electric
Average sticker price: $38,323
Average transaction price: $37,451
Average discount: 2.3% or $872
Average sticker price: $56,748
Average transaction price: $54,917
Average discount: 3.2% or $1,831
Kia Niro EV
Average sticker price: $43,918
Average transaction price: $42,685
Average discount: 2.8% or $1,233
Lexus RZ 450e
Average sticker price: $64,407
Average transaction price: $61,758
Average discount: 4.1% or $2,649
Average sticker price: $63,337
Average transaction price: $59,570
Average discount: 5.9% or $3,767
Mercedes-Benz EQE SUV
Average sticker price: $87,179
Average transaction price: $81,146
Average discount: 6.9% or $6,033
Average sticker price: $51,912
Average transaction price: $49,654
Average discount: 4.3% or $2,258
Average sticker price: $33,745
Average transaction price: $32,926
Average discount: 2.4% or $819
Average sticker price: $139,575
Average transaction price: $137,352
Average discount: 1.6% or $2,223
Average sticker price: $49,387
Average transaction price: $48,191
Average discount: 2.4% or $1,196
Average sticker price: $50,694
Average transaction price: $47,812
Average discount: 5.7% or $2,882
Volvo C40 Recharge
Average sticker price: $61,419
Average transaction price: $55,498
Average discount: 9.6% or $5,921
Volvo XC40 Recharge
Average sticker price: $60,998
Average transaction price: $53,241
Average discount: 12.7% or $7,757
Electric Cars & Price Cuts
The outlier here is Tesla. There is no negotiating with the company. The price you see on the website is the price you pay. Until late last year, prices of its cars were going up, up, up. Then in December, Tesla began offering customers $7500 off on most models in order to juice sales in the fourth quarter. That made perfect sense, since those cars would become eligible for a $7,500 federal tax credit in just a few weeks. Who wouldn’t put off buying for a short time in order to save $7,500?
A series of price cuts this year have brought the cost of a basic Tesla Model Y down to $43,990 before federal and state rebates, taxes, and fees. The Model 3 is $38,990 before rebates and charges, according to Tesla’s website. Both models qualify for the full federal EV tax rebate, which makes the effective price of those cars $36,490 for the Model Y and $31,490 for the Model 3. At those prices, both are well below the average transaction price of a new car in America today, which which was $48,334 as of the end of July according to Kelley Blue Book.
So, there is no haggling with Tesla. That’s good. But, it also means the price you pay could be thousands more than what others might pay in a few weeks or a few months. Price cuts also have a way of taking money out of the pockets of current owners who bought when the price was high. Think of someone who purchased a Model Y back when it sold for $66,000.
As soon as Tesla lowered the price of the Model Y, that car bought 18 months ago is now worth thousands less at trade-in time. In one sense, Tesla has picked the pockets of its faithful owners to the tune of millions of dollars. One CleanTechnica staff member has seen the price of the Model 3 he bought in the spring decline by $8,000, which means his equity has decreased by a corresponding amount, but the amount of his car loan has not. The market giveth and the market taketh away.
The bottom line is, never buy a car thinking you will make money on it. Cars are some of the worst investments anyone can make. For those who love to get down and dirty with the sales staff at the local dealership, now is the time to go grab a deal on electric cars. For the rest of us, it’s back to business as usual unless you want to buy online and take your chances with the whims of Elon Musk and his minions. The choice is yours, even though neither option is all that satisfactory.
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