The Paradox in the U.S. Market, Electric Cars Are Now Cheaper Than Gasoline Cars

Potential electric car buyers long for the moment when they can talk about a real price parity between these and combustion vehicles. Over the years, the gap is closing, although at a different pace depending on where you look.

In China, where practically half of the cars sold there are plug-in, they are very close to achieving it. European countries like Norway show the way forward: if electric cars can be priced affordably, many buyers will choose them.

And in the United States? Well, in the land where large cars and trucks stand out, especially gasoline ones, the truth is that the tax credits launched by former President Joe Biden significantly boosted the electric market, which, however, remained quite limited.

Now, with Donald Trump on a crusade against electric vehicles, forecasts point to a drop in their sales. However, for a brief period, this has not been the case, partly thanks to the American president. In a few days, the situation, however, should return to “normal.”

Why Are Electric Cars Cheaper Than Gasoline Cars?

Let’s look at the numbers, because the graphs with data from JD Power are very clear: in July and August, the average purchase prices of new electric cars were below those of combustion vehicles.

Let’s look at August: the average cost for a new electric car was $44,908, compared to $45,521 for combustion cars. To make matters worse, note this: in January 2023, just “two days ago,” the average price of electric cars in the United States was €62,500.

That is, in less than three years, electric cars have gone from being on average $16,000 more expensive than gasoline cars to being $600 cheaper. How could this situation have occurred? The explanation is easy to understand.

The Trump administration approved just before summer its “One Big Beautiful Bill”, which states that as of September 30, the tax credits of up to $7,500 that helped Americans buy a new electric car will be eliminated.

Knowing that state aid was going to disappear, brands have launched into the market adopting generous and aggressive discounts to ultimately liquidate their inventory. And starting October 1, those cars will be much harder to sell. “The deals you can find are really incredible,” analysts say.

That is the main reason why average purchase prices have plummeted just in the months following the signing of the new law and before the application date of the provision that affected electric vehicles.

The sale of electric cars in the United States reached a record 9.9 percent in August, according to data from Cox Automotive, when the trend in recent years was that the growth rate was slowing down. “In the short term, electric vehicles will likely, at best, remain stable. But in the long term, we remain optimistic about electric vehicles. We don’t believe this is the end.” Let the optimism of experts not wane.

Fuente: InsideEVs