Average EV Price To Go Below Combustion Vehicles In U.S. Next Year: Study

The average price of an electric vehicle in the U.S. will reportedly be lower than that of a gas vehicle in the U.S. by next year.

What Happened: According to a graph published by the Wall Street Journal citing the Economics of Energy Innovation and System Transition project led by the University of Exeter, the average price of an EV is already lower than its combustion engine counterparts in China, Europe, and India.

In the U.S., it would hit a lower price point next year, the report said. Currently, EVs are priced higher than combustion engine vehicles, making it harder on the consumer pocket despite ongoing price wars and incentives. In October, Ford Motor Co F said that it is pausing its $12 billion electric vehicle funding, citing the high cost of EVs and customers’ unwillingness to pay the premium.

Tesla CEO On Affordability: “Demand is very much a function of affordability not desire," Musk said at Tesla's investor day event in March.

Even as recently as during the company’s latest earnings call last month, Musk expressed concerns about dwindling demand owing to high EV costs. The monthly payments customers pay for the cars haven't really changed despite price cuts owing to the high-interest rates, he said

"I’m worried about the high-interest rate environment that we’re in. I just can’t emphasize this enough that the vast majority of people buying a car is about the monthly payment," Musk said.

"When you look at the cost or the price reductions we’ve made in, say, the Model Y and you compare that to how much people’s monthly payment has risen due to interest rates, the price of the Model Y is almost unchanged," he added.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

Read Next: US Hybrid Frenzy Powers Toyota To Historic Sales, Production Figures In October