4 reasons why now is a good time to buy an electric vehicle

Electric vehicles were in short supply last year as the average cost of gasoline topped $5 a gallon. But now is a good time for drivers considering an EV to make the leap, according to car experts. Here's why.

Dealerships have more cars

Years ago, buying an EV usually meant jumping on an online waiting list for a Tesla and being patient until it arrived. But those days are over because car dealerships now have excess supplies of electric cars, said Brian Moody, executive editor of Kelley Blue Book and Autotrader. Dealerships had a combined 92,000 unsold EVs sitting on their lots at the end of the second quarter, according to Kelley Blue Book data, more than four times the number a year ago.

Moody said automakers are stockpiling EVs as they seek to capture a larger swath of U.S. motorists. 

"We are running into the end of all the gotta-have-EV car buyers," Moody said. "Now you're going to have to convince the average person that, 'Hey, this vehicle is a great deal for you no matter how it's powered.'"

Jessica Caldwell, executive director of insights at Edmunds, also said automakers are moving away from marketing their EVs chiefly to high-end buyers. Having a hefty supply of vehicles means dealerships also may offer better buyer incentives or be more willing to bargain price. 

Prices are dropping

The average price for a new EV was $53,438 last month, according to Kelley Blue Book. That's down sharply from $66,390 a year prior. 

The price drop is a welcoming sign for the average American, many of whom are only looking to spend between $40,000 and $50,000 for a new car, Moody said. "For those people, it's starting to look like the prices are headed in their direction."

Electric car leader Tesla, along with truck specialist Rivian, have both lowered their prices in recent months. And Ford last month slashed the cost of its F-150 Lightning electric pickup by at least $6,000 after several price hikes in 2022 and early 2023.

"Prices should be better than they have been over the past year, particularly for EVs," Caldwell said. "The only thing that could upset that is more issues with production — for instance, the [United Auto Workers] talks coming in the fall. If that goes left, that could affect GM or Ford."  

More charging stations 

EV owners have long complained about a shortage of places to charge their vehicle. Automakers in recent months have tried to address that issue by adopting a uniform charging port for all EVs and installing more stations nationwide. 

Ford, GM, Mercedes-Benz, Rivian and Volvo have announced plans to convert their EV battery ports to the same chargers Tesla uses in its vehicles. A Tesla supercharger uses a three-pronged connector — known within the industry as the North American Charging Standard (NACS) — to send 120 volts of electricity to a vehicle's battery. A 15-minute charge gives a Tesla enough power to travel up to 200 miles, the company says on its website.

Mercedes-Benz said earlier this month also said it plans to add more than 2,500 NACS charging stations by the end of 2030. 

Shoppers are still concerned about finding a charging station and how long it will take their vehicle to reach full power, Caldwell said. Automakers will need to pay as much attention to adding chargers as they have to lowering prices, she added. 

Federal tax credits available

The federal government is also offering up to $7,500 in tax incentives to buy an EV. 

The credits, which last until 2032, are designed to encourage more Americans to buy eco-friendly vehicles. Some gas-electric hybrid vehicles are eligible for half the tax credit, or $3,750, while drivers who purchase certain pre-owned electric vehicles this year can get a $4,000 credit.  

The following eight vehicles are eligible for the full $7,500:

• Cadillac Lyriq
• Chevrolet Blazer
• Chevrolet Bolt & Bolt EUV
• Chevrolet Equinox
• Chevrolet Silverado
• Ford F-150 Lightning (both standard and extended range battery)
• Tesla Model 3
• Tesla Model Y (both all-wheel and long range drives)

Customers who purchase those cars can have the tax credit applied to their 2023 return.

In:
• Electric Vehicle

Khristopher J. Brooks

Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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