In July and August, Electric Cars Were Cheaper than ICE Cars in the U.S
[Music] EVs are now cheaper than gas cars in America. Um, sounds wild, but actually it’s true. At least for another week. Anyway, hello my friends. Welcome to the channel. I’m Sam Evans. You’re watching The Electric Viking. YouTube’s new algorithm means that you’re often not getting all of our videos in your feed. There’s 7,500. I’m pretty sure you’re probably not seeing a lot of them. In the description, there is a link to our newsletter. Click on that and you can get an update every day of all the latest news in the electric car industry. Inside EVs has reported that price parity between electric and combustion vehicles has launched electric vehicles into the stratosphere in the few markets that have that have reached that elusive milestone. Now, of course, we know in China in many cases, EVs are cheaper than hybrids or gasoline powered vehicles. Not always, but often they are. And that price decline, not that price advantage I should say, of EVs will continue to grow. The logic is simple here. Electric cars may be cleaner, cheaper to refuel, and faster from standing stop than gas vehicles, but um if you can’t afford one in the first place, then well, you can’t benefit from the savings. Now, interestingly, the critical turning point to EVs being cheaper than gasoline powered vehicles in the US actually happened this summer during a time of massive uncertainty for the country’s clean car industry. However, it’s not going to last. In July and August, the average transaction price for an EV was less than that of a combustion powered vehicle. And I reported on that actually about a month ago, showing well, not quite a month ago, actually, it was 3 weeks ago, showing the average transaction price of EVs was a fair bit lower than the average transaction of combustion cars. Last month, the average new EV cost an estimated $44,900, $600 less than the $45,500 that was paid for a gas vehicle on average. In January 2023, before Tesla started cutting prices, the average EV cost $62,500, which was $16,000 more than the average price of a gasoline powered vehicle, according to data from JD Power. So, isn’t that amazing? The price, right, during this period of time, in the last two and a half years, inflation has skyrocketed. You’d think the price of EVs would have gone up, but instead it’s gone from 62,500 to $44,000, which is an a remarkable achievement. And looking at this chart, you can see here um this is from data rapper and JD Power. You can see here the decline in price for EVs has been staggering. Just imagine when we’ve got sodium batteries which are much much cheaper to manufacture. Imagine how much further the price of EVs will fall. Now, as you can see, the cost of internal combustion cars hasn’t declined at all. It’s pretty much the same. And really, the only trend here is that EVs prices are going down whilst internal combustion prices are not going down. The gap of $600 is small, but it is still a big shift when you consider the historical change. And here’s what JD P’s Tyson Germani, the firm’s senior vice president of data and analytics, said, “It is recent and rare that we’re seeing EV transaction prices fall below internal combustion.” However, unfortunately, the clock is ticking. There’s some amazing EV deals on right now, but in one week, uh, EV incentives in the US will be cancelled until Donald Trump leaves office, at least anyway. Once we hit October, the clock strikes midnight on October the 1st. A lot of these EVs turn into pumpkins and they become more difficult to sell, he said, because they no longer have the $7,500 tax credit. Some manufacturers like Lucid and others are still offering that tax credit. They’re still going to they’re going to discount their cars $75,000 US uh at least in the near-term future after that tax credit u has expired from the United States government in August. The average manufacturer incentive spend per EB hit nearly $75,000 said JD Power and the firm put the average discount from the EB tax credit at around US $5,000. Now, even though something of a loophole, all EV leases can benefit from the entire $7,500 EV tax credit for EVs purchased outright. Rules surrounding assembly location, battery sourcing, and personal income mean that only a fraction of models qualify. As a result, since the latest tax credit policy took effect in 2022, EV leasing has exploded, hitting 70% of EV transactions in July. In fact, as well as that, there’s some amazing deals. For example, the Volkswagen ID4 you can lease for about $130 US a month. That is crazy. Fedally funded discounts have risen in parallel. JD Power says that consumers buying or leasing a new EV saved $5,000 thanks to the federal tax credit in 2024, up from 4,300 in 2023. This is actually mirroring, like I said before, what has been happening in China. Government incentives and programs have helped Chinese companies to make more affordable cars. So has mass production. I mean the truth is the US hasn’t really hit mass production of EVs yet. Neither has Europe. Only China has done that. And EVs in China are much cheaper than in the United States and Europe. In 2018 in China, only 10% of electric cars sold in the country were cheaper than their internal combustion engine equivalents, according to the International Energy Agency. By 2024, that proportion rose to 66%. As costs plummeted, annual EV sales in China grew 8fold during that 6-year period from 800,000 units to 6.4 million. This year, China is on track to hit 12 million. Compare that to what’s happening in the United States in 2024. Just one in five electric SUVs and pickup trucks was sold at a lower price than the average gasp powered equivalent, says the IAA. And just two electric models were priced below 30,000 compared with 50 options in the combustion segment. In other words, things are getting much better in China, but not that much better in the United States, and they could be about to get a lot worse, unfortunately. Let me know how you feel about this in the comments. Thank you for watching. Bye-bye. The Sydney EV International Motor Show. If you want to get a 50% discount on your tickets, all you got to do, click the link in the description and use the promotion code that’s in the description. Just copy and paste that. Now, I should mention there’s only 200 tickets available per day. So, if you go to use the promo code and you can’t get a ticket, wait till the next day. Don’t wait until the day before the show to get your tickets cuz otherwise you’ll probably miss out on getting the 50% discount. [Music]
In July and August, Electric Cars Were Cheaper than ICE Cars in the U.S
For the first time, electric cars in the U.S. were cheaper than internal combustion engine (ICE) vehicles in July and August 2025. Aggressive discounts, tax credits, and rising gas prices pushed EVs below their gasoline counterparts on average transaction prices.
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