Unlike the traditional car market, electric vehicles (EV) experience price fluctuations that can lead to one customer paying significantly less for a car than another.
- Commodity costs and other economic factors make pricing EVs more complex than traditional vehicles.
- The dramatic fluctuation means that the timing of a purchase is just as crucial to the customer as choosing an EV model. Some customers will pay more than others, depending on the day.
- Typically, automakers suggest a retail price to the dealers. While these prices may vary from one dealership to another due to added incentives or price hikes, it is unusual for prices to change by thousands of dollars from one day to another, Axios reports.
- EVs, however, are changing that model. Tesla and Ford have made drastic price changes in the last year.
- New tax incentives have also changed the price of an EV as more vehicles now qualify for benefits.
Why it’s news
Inflation and commodity prices have decreased EV sticker prices in the last year. Lithium costs have declined, making EV manufacturing cheaper. At the same time, inflation has started to ease, lowering costs everywhere.
More than ever before, a vehicle’s price can be affected by external factors. However, for automakers, this means their product does not have a reliable price. The sudden price jolts can positively or negatively affect manufacturers’ bottom line, depending on how consumers respond.
While Tesla’s price drops increased demand for the vehicles, the company’s gross profit margin suffered, Axios reports.
The real question will be whether or not customers can time their purchases correctly to take advantage of the price cuts and avoid price spikes. So far, the price changes have no real, predictable pattern.
Either way, buyers are beginning to get some leverage back as overall vehicle prices start to trend downward.