EV sales surge as average price drops 4%
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- Kelley Blue Book reported the average transaction price for a new electric vehicle fell to $54,532 in May, a 4% year‑over‑year decline and the 11th consecutive month of price drops.
- Electric‑vehicle sales exceeded 85,000 units in May, the strongest month since federal tax credits were eliminated at the end of Q3 2025.
- Automakers spent an average of 14% of a vehicle’s price on incentives in May—about $7,600 per car—nearly double the industry average and unchanged from April.
- Tesla accounted for roughly half of U.S. EV sales, with its average price down 1% from April and 3.4% YoY; 96% of its sales were the Model 3 ($49,082) and Model Y ($51,537).
- Used‑EV market saw a spike as lease expirations lowered used‑vehicle prices, while rising gasoline prices helped sustain demand despite the loss of federal tax credits.
Why it matters: Consumers benefit from cheaper EVs and generous incentives that offset the loss of federal tax credits, while automakers protect sales volumes; Tesla’s aggressive discounting amplifies the market‑wide price decline, reshaping the cost baseline for new electric vehicles. This shift may pressure rivals to lower prices, further intensifying competition.
