EV prices drop again as the gap with gas cars hits a record low

EV prices are still coming down in the US, and the gap with gas cars is now the smallest it’s ever been, according to new Kelley Blue Book data.

The average transaction price (ATP) for a new EV in March was $54,508. That’s down 2.8% year over year and marks the third straight month of declines. Prices also slipped 0.7% from February, which itself was revised lower.

That drop is starting to matter. The price gap between EVs and internal combustion engine (ICE) vehicles has narrowed to about $5,800 – the smallest gap Kelley Blue Book has recorded.

Incentives are doing a lot of the heavy lifting. In March, the average incentive for a new EV hit 14.6% of the transaction price, or nearly $8,000. That’s more than double the industry average and up from 14.2% in February. A year ago, incentives were at 12.9% of ATP.

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Tesla is playing a big role in pulling prices down. The EV maker’s average transaction price in March was $53,421, down 2.6% compared to March 2025 and 1.2% lower than February. Tesla also increased its incentive spending to 12.3% of ATP.

But even with lower prices, Tesla’s sales picture is mixed. Cox Automotive estimates that Tesla’s US sales fell 8.4% year over year in March. But on a month-to-month basis, sales are improving – Tesla deliveries rose 6.1% compared to February, marking the second straight monthly gain.

The bottom line: EV prices are easing, incentives are rising despite the loss of the federal tax credit, and the affordability gap with gas cars is finally narrowing.

Read more: EV prices fall again – and the gap with gas cars shrinks to $6,500

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