Gary Zhou 
Key Points
- 😲 Tesla has reduced its prices by 20% within a year, based on data from Kelley Blue Book.
- 📊 Electric vehicle transaction prices as a whole have improved by around 18%.
- 💰 Tesla’s average transaction price in July was $54,660, showing a 0.8% improvement from June.
- 📉 The most significant decrease in transaction price was in July 2022, with a 19.9% drop from the previous year.
- ⚡ Electric vehicle prices overall have fallen 17.9% in the past year, from $65,108 to $53,682.
- 🚗 Market leader Tesla has led the fall in EV prices, with incentives in July being 6.7% of the average transaction price.
- 🔄 Tesla’s price cuts in 2023 have created competition and encouraged other automakers to adjust their prices.
- 🇨🇳 In China, Tesla has lowered Model Y prices by up to 4.5% and offered subsidies on Model 3 vehicles.
- 📈 Tesla’s strategy of price adjustments aims to stimulate demand and compete effectively.
- 🤖 CEO Elon Musk is willing to sacrifice margins for increased vehicle production and sales.
New data from Kelley Blue Book reveals that Tesla has implemented a remarkable 20 percent reduction in its prices within a single year, while the electric vehicle (EV) sector as a whole has observed an approximate 18 percent enhancement in transaction prices.
Kelley Blue Book meticulously tracks the average transaction prices, making comparisons with the previous month and the corresponding month from the preceding year.
In July, Tesla’s average transaction price stood at $54,660, displaying a 0.8 percent improvement from June’s figure of $55,105. However, the real revelation lies in the drastic improvement the automaker has achieved since July 2022.
A substantial 19.9 percent decline in transaction prices was observed compared to July 2022, during which Teslas were sold at an average price of $68,215. This striking alteration is the most significant shift among major automotive companies, as illustrated by the data.
The second-best decrease in price came from Honda, which saw a 2.6 percent decrease in average transactions from July 2022 to July 2023.
Electric vehicles as a whole also continued to drop in average transaction price from month to month at 0.4 percent, just below the industry average of 0.7 percent.
However, over the past year, EV prices have dropped 17.9 percent, going from $65,108 to $53,682.
KBB writes in its press release of the data:
“EV prices continue to fall, once again led by market leader Tesla. In July, the average EV ATP was $53,469, down from $53,682 in June and down from more than $61,000 in January. Incentives for EVs in July were 6.7% of ATP, or $3,755. EV ATPs are down more than 19% from their recent peak of more than $66,000 just a little more than a year ago in June 2022.”
Tesla started 2023 with massive price cuts that helped the automaker put pressure on industry rivals like Ford, which also cut prices in an effort to remain competitive.
“The year-over-year decline of EV ATPs has been led by Tesla slashing prices on its popular models,” Research Manager for Cox Automotive, Rebecca Rydzewski, said. “Tesla prices are down nearly 20% versus a year ago, and other EV models, such as the Ford F-150 Lightning, have been following Tesla’s lead. While automakers report losing money on electric vehicles, they continue to aggressively pursue EV growth strategies.”
