Over much of the past year, new electric vehicle (EV) prices were trending right along with new vehicle prices overall, which means they were sky-high.
The chances of getting a new electric car for a good deal seemed gloomy going forward as inventory issues were still being sorted out and automakers were still trying to ramp up production. But that was before Tesla CEO Elon Musk responded to the softening market by slashing prices on his popular cars.
Electric Vehicle Market Vs. Vehicle Market Overall
According to December 2022 data, the latest available, from car valuation site Kelley Blue Book, electric vehicle prices shrank by $3,500 month-over-month while new vehicle prices reached another high – $49,507 – at year’s end. As for used vehicles, Clark’s prediction of a slow descent in price was coming to fruition – but then came Tesla.
“Tesla cut prices from a moderate amount to a very large amount of money and now a number of Tesla models are selling below the average selling price of a used vehicle in the United States,” Clark says. “Ford, which has been the furthest forward in being an aggressive competitor to Tesla in the United States, responded almost immediately and cut the cost of a Mustang Mach E down to a starting price of $45,000, which also is lower than the average vehicle price in the United States.”
With prices starting to recede for some electric vehicles, consumers may be wondering if it’s the right time to jump into the market.
Should You Buy an Electric Vehicle Right Now?
Clark’s view is that early 2023 is still not the best time to buy an EV because, “Even with these price cuts, we are early in the electric vehicle game.”
“Unless you’re at a natural buying cycle for a vehicle right now, I absolutely still hold to what I said last year and reiterated again in early January on my podcast: It makes sense to let the clock run some because things are moving quicker in the direction that I expect them to go,” Clark says.
Clark does expect however that at some point later in the year and most likely in 2024 that EV prices will be more affordable due to what it will cost to produce them.
“And we are looking not far away from the actual cost of manufacturing an electric vehicle being cheaper than the manufacture of a gas-powered vehicle.”
If You Absolutely Have To Buy an Electric Car, Read This
Clark says waiting on car prices to drop makes the most financial sense, but there’s another sector of the market that is often forgotten: used electric vehicles.
“That’s something we don’t talk about a lot,” Clark says, “is the opportunity that exists from buying a used electric vehicle, many of which, from other manufacturers besides Tesla, have very small battery packs that can be a very affordable choice for urban/suburban commuting,” Clark says.
Despite Tesla slashing prices (and Ford following them), Clark is not sold on Musk’s cars as a purchase right now. Even though he has one and has historically been a fan, Clark says he wouldn’t buy a Tesla right now.
The Best Used Electric Cars (That Are Not Teslas)
According to the vehicle research site, iSeeCars.com, here are best used vehicles right now based on reliability, resale value and safety:
| Vehicle | Range | Used Price |
|---|---|---|
| Nissan Leaf | 150 – 226 Miles | $17,998 – $38,949 |
| Chevrolet Bolt | 259 Miles | $21,989 – $39,764 |
| Hyundai Ioniq | 259 Miles | $21,536 – $37,969 |
| BMW i3 | 153 Miles | $21,872 – $39,972 |
| Mini Hard Top 2-Door | 110 Miles | $30,224 – $41,955 |
Final Thoughts
The overall car market is showing signs of improving, which Clark predicted, but he says now is not the time to buy a new electric vehicle and especially not a Tesla. However, there’s a caveat:
As for new vehicle purchases, he says, “Yes the math just got better, from Ford and Tesla, but it’s going to get much better from here if you stick with my original advice and wait until much later this year or in ‘24.”
