Now Is a Great Time to Buy an EV. Here’s How to Score a Deal.
You can take advantage of rising inventory.
First of all, I want everyone to just take a deep breath and calm down.
Despite data that indicates much slower sales than many anticipated, the American electric vehicle market is not collapsing before it ever really took off. EVs are not failed experiments, public and private investments into battery plants and public chargers are not about to evaporate, and we are not collectively doomed to be driving coal-rolling trucks for lack of a better option until we’ve extinguished most non-cockroach life on this planet.
Three things are true, however. The first is that EVs remain expensive like any new technology, and while that means they aren’t flying off dealer lots in record time, sales are still growing fast — including globally. The second is that Tesla is still posting record revenues and huge sales. Its rapid-fire price cuts have paid off handsomely; the Model 3 and Model Y are lapping everyone else in the EV race because they’re screaming deals. That fact alone has me not worried about declining EV demand.
The third thing is that now may actually be a good time to buy an EV, if you know where to look.
Do you feel better now?
EV adoption remains a long-term (though increasingly difficult) goal for many automakers. More EVs are coming and prices are expected to drop over time as the technology develops and batteries are built stateside. But while immediate action is needed on multiple fronts to reduce carbon emissions, it’s tough to ask many families to spend $60,000 on a Hyundai in this economy. And EVs piling up at car dealerships reflects this trend, but it doesn’t reflect a lack of interest, experts told me.
“I don't think that's fair to say no one wants EVs,” said Brian Moody, the executive editor of Cox Automotive, the research firm that sounded the alarm about EV inventory increasing. “I don't think that's accurate.”
Moody added, “One thing that we see is that about 50% of shoppers say they're open to the idea of getting an electric car, so that's a pretty good number and that probably bodes well for the future. But that doesn't necessarily translate to sales tomorrow.”
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Cox Automotive’s data indicates U.S. car dealers had a more than 100-day supply of EVs on their lots on average by the end of June — 60 days is considered healthy — and the average EV lists for $63,486. So at a time when interest rates are high and car buyers’ budgets are squeezed, Moody said they may find a $36,000 Hyundai Sonata Hybrid more appealing than a $50,000 fully electric Hyundai Ioniq 6. “I think the good thing about EVs today is they provide consumers a choice,” he said.
Tom McParland has firsthand experience helping buyers to navigate these choices. He runs a consulting service that helps people purchase cars and contributes car-buying advice columns to publications like Jalopnik. (Full Disclosure: I was previously editor-in-chief of that site, where he was one of our contributors.) His service helps about 20 to 30 people a month to buy a car.
McParland said that last year, he was turning away customers who wanted to buy a Ford F-150 Lightning or a Mustang Mach-E because there were none to be found or because dealer markups were so extraordinarily high.
Now, he’s seen a “mixed bag” lately when it comes to EVs: “If I look at how many of my clients in 2023 are requesting EVs or plug-in [hybrids], there’s definitely an uptick overall compared to last year,” he said. However, “as soon as the tax credit rules changed, I saw a big dropoff in the level of interest for those cars,” he said. “Nobody was asking me for Ioniq 5s,” he added, referring to Hyundai’s cyberpunk-looking Model Y competitor.
For a few months at the start of the year, nearly every EV qualified for generous tax breaks. But by spring, only North American-built cars with North American-built batteries could get the incentives, excluding options from Kia, Hyundai, Volvo, BMW, Toyota, and others. And while car dealers don’t want those cars taking up space on lots forever, there’s only so much they can do — or are willing to do, McParland said.
“Dealers can only go so deep until the math no longer makes sense,” he said. “They are not going to discount that car 20% and lose 50% on the back end just to move it.” Also, while a kind of loophole allows more brands to qualify for tax breaks if they’re leased, McParland said he’s a bit skeptical that this always equals a good deal because the price cuts are baked into a lower residual value at the end of your term.
But it’s not that buyers aren’t willing to go green at all. To Moody’s point about hybrids, McParland said he’s seen a huge spike in buyer interest in those cars this year.
“If somebody comes to me looking for a Honda, they don't care about a gas Honda,” he said. “They want an Accord Hybrid, or they want a CR-V hybrid. Because the price delta between the gas and the hybrid version is not much.”
That’s a net positive for the planet. Hybrid cars are still a remarkable tool for reducing emissions right now in ways that may be easier to live with until a more robust EV charging network gets built out. Having said that, McParland told me to forget about deals on hybrid cars. “There’s no deals there because the demand is so high,” he said.
So where can you get deals on a green car right now, especially one that doesn’t use gasoline at all?
Some cursory hunting revealed a number of 2022 model-year EVs that are still “new” cars — maybe they’ve been at the dealership that long and just have a few hundred or thousand miles on them — and are going for almost fire-sale prices. Take this 2022 Hyundai Ioniq 5 with just 2,562 miles for a very tempting $40,000 even (about $6,000 to $10,000 off the average price.) Or this Kia EV6 with 7,353 miles and a $37,991 price tag. I’d seen a few examples recently of the Mustang Mach-E that also fit that bill.
There’s also still the Chevrolet Bolt, which is soon to be discontinued and has some outdated charging tech but is going out with a mid-$20,000 fire-sale bang. Not only are they eligible for the full $7,500 tax credit, but some states are giving extra incentives. In Colorado, for instance, you might be able to pick up one of the last new Bolts for around $15,000 after all the tax credits kick in.
On the manufacturer's side, Ford slashed the prices of the F-150 Lightning pickup (after raising them this year amid supply chain issues) by up to $10,000 this week, leaving the base Lightning Pro at $51,990. Now, that’s still more expensive than it was a year ago, but hey, a deal’s a deal. (It’s also eligible for the full $7,500 tax credit.)
McParland added that he’s seen some more aggressive deals on BMW and Mercedes-Benz’s electric models as part of their summer sales events as well. One reason might be that neither automaker has any fully electric car that qualifies for a U.S. tax credit at the moment. (For the record, I’m a fan of BMW’s i4 electric sport sedan, and other people seem to be too; BMW’s actually doing very well on the EV sales front this year.)
“We're seeing some manufacturer incentives… more so on the higher end of the market,” McParland said. So maybe not great news if you want a commuter on a budget, but not bad if you can stand to treat yourself a bit.
And there’s always Tesla. While McParland said some of his customers have been turned off by the CEO’s recent antics or just want some variety — “People have come to me, and this is the exact conversation. I want EV but I don't want to buy a Tesla, that sort of thing,” he said — the fact is that the cars’ specs are still among the best out there. So are the deals. Between Tesla’s own price cuts and the EV tax incentives, these are hot sellers for good reason right now. “And you’ve got people looking into used ones now that there are so many out there,” McParland said.
Moody added that there are other ways to save on EV ownership besides just the car, too. Many manufacturers offer deals on home chargers or are throwing them in for free. There are also state and federal tax incentives to help cover the cost of charging. “I would not just call a place someplace up and buy [a charger,]” he said. “I would do a lot of research and see if I could get one for free or at a discounted rate.”
Finally, McParland said patience may be a virtue as the year goes on and new model-year cars hit dealerships. That’s when they get more aggressive at moving the older stuff.
“My prediction is that as we start to get closer to the fall, the deals might even get better than they are now,” he said. “I think we're still in the early stages of this ‘too much inventory’ situation.”
America is past the “early adopter” stage of EVs, when people were evangelizing gas-free cars but had few choices and terrible options for living with them. But we’re not in the critical mass stage, either. Getting to that point could take a number of years; transitioning to zero-emission transportation was never going to happen overnight, even if we need it to.
In the meantime, if you see EV ownership in your future, be on the lookout for great deals as much as you are for public chargers near your place.
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