In August, incentives for EVs were 80% higher than for gas cars

Incentive packages for all cars were higher overall in August, but EV incentive packages continue to trend well above industry averages, reports Kelley Blue Book.

The average incentive package for new cars in August equaled 7.2% of the average transaction price (ATP), up from 7.0% in July to the highest level since the first half of 2021. Year-over-year, incentive spending was 4.8% of ATP. 

EV incentives in August continued to trend well above industry averages, at 13.3% of ATP, higher than July and at the highest point of 2024. On average, EV incentives last month were more than 80% higher than gas product.

The ATP for an EV in July, at $56,575, was marginally higher than the revised July ATP of $56,435 but lower year-over-year by more than 1.2%, suggesting the EV price declines are slowing. A year ago, in August 2023, EV ATPs were lower year-over-year by nearly 13%.  

The average transaction price for a new Tesla declined slightly in August compared to July but was higher year-over-year by 10.7% at $59,138.

Tesla Model Y, the best-selling EV in the US, had an ATP of $52,482 in August, which was lower than August 2023 but higher month-over-month for the sixth month in a row. Cybertruck ATPs increased month-over-month in August as well, increasing for the third straight month and reaching a new high of $112,241. With sales estimated at 4,784 last month, Cybertruck continues to be the market’s best-selling product priced over $100,000.

Electrek’s Take

As my colleague Jameson Dow wrote yesterday, “Sales of battery electric vehicles, while continuing to grow, have posted lower year-over-year percentage growth rates than they had in previous years.” Kelley Blue Book parent company Cox Automotive executive analyst Erin Keating said that “dealers are telling us the sales environment is humming along at a muted pace…”

Remember when there were no cars on dealers’ lots a couple of years ago, thanks to pandemic supply chain issues, and car salespeople were making tons of money due to high demand and low supply? Yeah, that’s over.

So now, in the face of higher interest rates and plenty of stock, dealers are trying to sell cars with dealer incentive packages. That doesn’t mean there’s an EV sales slump – it means they’re using the tool they have to move product. There’s slower growth of EV sales for the reasons I just gave (and Jameson went into detail on in his post).

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