A new JD Power study shows new discounts and financing options could help drive increased adoption rates of electric vehicles.
What Happened: The average price of new EVs continues to decline thanks to new more affordable models and discounting across the sector.
New discounts on EVs are helping to bring the price of an EV closer to gas-powered vehicles, according to the report.
The JD Power EV Index, which tracks the prices of EVs to gas-powered vehicles, showed a score of 56 out of 100 in July — a record high. This marked the fifth straight month the JD Power EV Index parity score rose.
"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, but the industry seems to be struggling to attract more buyers than a year ago," JD Power Vice President, Electric Vehicle Practice Elizabeth Krear said.
Krear said availability has improved for EVs, which may have helped with the 28% figure, but it might have more to do with pricing.
"Incentives have helped align prices in popular compact and midsize mass market segments, making them more affordable. Mass market and premium BEVs are at and above parity with gas-powered alternatives – from a cost of ownership standpoint."
Krear said battery-powered electric vehicle monthly retail sales were 9.2% for June and July.
Another item contributing to the increased interest from buyers is increased charging infrastructure options. Vehicle purchasers said companies like Ford and Rivian having access to the Tesla Inc TSLA Supercharger network was a contributing factor in buying an EV.
Read Also: Move Over Ford And General Motors, There’s A New No. 2 Electric Vehicle Maker In The US Behind Tesla
Why It's Important: JD Power predicts U.S. automotive sales will hit 1.4 million in August, up 4.2% year-over-year. Along with EV seeing lower prices, the cost of a new vehicle is expected to be down for both EVs and traditional automobiles.
Another positive area for EVs is the fact that there are more electric SUVs and electric pickup trucks now available to consumers. Trucks and SUVs are expected to make up 80% of new vehicle retail sales in August according to the report.
The latest JD Power report could be positive for Tesla as the company's vertical integration has helped the company lower the cost of mass-produced EVs.
Other traditional automakers like Ford Motor Company F and General Motors Company GM have struggled with making profitable EVs. Ford recently announced it was scrapping its plans on a new electric SUV and is delaying a new electric pickup truck from 2026 to 2027.
Ford said it plans to spend less on EVs to cut costs.
EV companies and traditional automakers continue to walk a delicate tightrope of making affordable vehicles and also reigning in costs to work towards profitability. The JD Power survey shows demand may be greater than expected in the coming year if the incentives and lower costs continue.
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