When will EVs be as Affordable as Regular Cars?

When will EVs be as Affordable as Regular Cars?

The electric vehicle is the most recent development in automobile technology. However, as is the case with every cutting-edge innovation, initial pricing will be expensive, but when manufacturing costs level off, retail prices will decrease and more people will be able to buy the product. 

Many people are wondering when will electric vehicles become affordable? When will electric vehicles redefine the new pricing standards and be similarly costly as regular cars?

Although defining affordability varies based on personal financial standings, making it a nuanced topic to address. Electric vehicles are still out of reach for a lot of consumers, while they are now cheaper to make and sell than they have ever been due to advances in battery technology. Yet, analyzing battery pricing, retail prices, and market trends provides valuable insights into the trajectory of electric vehicle affordability. These variables contribute to the uncertainty around the optimal pricing range for electric vehicles. 

Affordable EVs are soon to come and they might even be already here, this article will explore the different factors that are influencing the current pricing scheme of most EVs.

EV pricing in Canada

According to data published by the Canadian Automobile Association, electric vehicle prices in Canada range from $40,000 to $189,000 per vehicle. The majority are between $50,000 and $90,000. These prices do not include federal incentives of up to $5,000 for electric and hybrid vehicles, as well as various rebates and savings that vary by province and territory. 

The average transaction price for an electric vehicle (EV) is $56,437 according to statistic complied by Kelley Blue Book, this cost is about $10,000 more than the overall industry average of $46,329 for a new car (of any powertrain) in August 2023.

In terms of cost, an EV is comparable to a mid-level luxury vehicle. Despite the luxury leanings of most new models, historical data shows that EVs are becoming more affordable. The average price paid for a new EV has dropped by 16% in 2022 according to KBB. New EV pricing peaked in June 2022 and has since dropped by more than $8,000 since then.

Just because the average sale price of an EV is upwards of $90,000, that doesn’t mean that there aren’t any options that are reasonably priced well below that threshold. You can quite easily find EVs from major automakers that are being sold for well below the price of $90,000 such as the Model 3 from Tesla, the Polestar 2 or the Ioniq 5 from Hyundai. 

These vehicles are the foundation of affordable EVs that are priced very competitively against traditional ICE sedans. Buying more reasonably priced EVs or buying lower-tier trims can greatly help reduce the price of EVs making them more affordable. Oftentimes, options offered on EVs such as Tesla and Polestar will not greatly improve your driving experience or comfort as they offer either outside aesthetic upgrades or technological upgrades such as autopilot or a better information system.

Government Incentives

EV buyers in Canada are able to save money on EVs thanks to provincial and federal subsidies. The goal of these EV incentives is to make affordable EVs even more accessible to the general public by lowering their entry price. 

The Incentives for Zero-Emission Vehicles (iZEV) Program, funded by the Canadian government, gives up to $5,000 in incentives when you buy or lease a qualified vehicle. Therefore, the initial investment in an electric vehicle may be largely reduced via incentives offered by federal and provincial governments. 

Extra financial aids are also available depends on the province and territory, to further lower the entry barrier to EV ownership. These incentives may also cover the cost of installing home charging infrastructure making the process of owning an EV more affordable. 

EV Affordability

While the cost of electric vehicle batteries has decreased significantly over the years, they still account for the bulk of the car’s expenses. Most electric vehicles will likely stay out of reach for the average consumer until the price of batteries and other production expenses decrease to levels more in line with gas-powered vehicles. 

However, when more and more electric vehicles are sold, manufacturing costs will inevitably decrease, and these savings should be passed on to consumers in the form of lower retail pricing. More competition has caused the prices of certain EVs that have been on the market for some time to drop. 

For instance, when it was first introduced in 2017, the Tesla Model 3 cost about $65,000 CAD. Six years later, the base price of a Model 3 is about $55,000 CAD before taxes and fees. This shows that once there is more and more competition entering the EV market, automakers have to naturally reduce their prices to remain competitive with the market netting a benefit to the consumers that can purchase more affordable EVs.

In this case, the price of electric vehicles should continue to decrease. There will be a larger price range since there are more automobiles to pick from. EV pricing is now range from $40,000 to $189,000, the lower-end range of vehicles will hopefully allow for more individuals to access affordable EVs.

How to make EVs more affordable

Stick to economy class EVs, used EVs, or alternatives, low-priced EVs provide the same conveniences as more costly models, but at a more reasonable price. Affordable EV options include the Nissan Leaf, Chevrolet Bolt, and Hyundai Kona Electric. Not purchasing the most expensive EVs or those that don’t qualify for government incentives can greatly reduce the cost of EVs. Just because expensive EVs exist does not mean you should buy them and you as a consumer should focus on EVs that you can afford. 

You should always take advantage of EV incentives and any rebaits that are available to you when purchasing an EV. This can greatly reduce the price of the vehicle and make it much more affordable. Getting direct discounts on the cars or getting credits afterward makes EVs that were once expensive much more affordable for a greater amount of people. Furthermore, having access to EV charging stations and at-home charging makes owning an EV even more affordable because you won’t need to pay for gas.

If you want to find good deals or extra affordable EVs, used electric vehciles have always been more cost-effective than new ones. Used EVs are subject to the same rules. There are benefits and drawbacks to purchasing a pre-owned EV, but if you are well-informed, you shouldn’t have any problems with a used EV. Buying the right used EV has very little downside and can help you save a lot of money.

Considering a used EV? Carnex is the top online EV expert for buying and selling used EV in Canada.

If you’re looking for a used electric vehicle, Carnex have everything from affordable EV models to premium models.

In conclusion, there have been many positive developments on the road to making electric cars more accessible. It’s vital to keep in mind that although EVs still sell for more on average than conventional ICE vehicles, the market is changing rapidly. 

Technological advancements are critical in the struggle for affordability. The advancement of battery technology, as evidenced by improved energy density and lower production costs, is a game changer. This not only increases the range of electric vehicles but also contributes significantly to cost savings. More reasonably priced choices are appearing from different manufacturers as the cost of producing EVs continues to decline. 

In Canada, EVs are becoming more widely available because to federal and provincial government incentives. Lower-priced EV models, potential tax credits and rebates, and used EVs are all options for buyers looking to keep costs down. There is promise for a cleaner and more sustainable transportation future since the trend toward inexpensive EVs is already underway.

As always, Carnex can provide you with detailed information about buying and selling EV in Canada. 

Carnex is the top online EV expert for buying and selling used EV in Canada.

If you’re looking for a used electric vehicle, Carnex have everything from affordable EV models to premium models.

Every EV at Carnex if fully certified and passed inspection by our experienced EV specialists.

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