Electric vehicles were once the ugly ducklings of the automotive industry. Many auto enthusiasts found hybrids like the Toyota Prius to be weak and boring. EV skeptics believed that vehicles with electric powertrains would never be as practical as the internal combustion engine vehicles that the world has grown accustomed to. The electrification of popular vehicle segments is the biggest shift the industry has seen in decades. The new average EV transaction price hints at what the electric future may look like and when change could come.

Electric vehicles are becoming more affordable

InsideEVs claims that the average EV price is $55K. The average transaction price of electric vehicles is down by as much as $10,000 year over year. That’s a price drop of about 15% in a single year.

This average transaction price drop is significant because the average new vehicle price is around $50,000. So, EVs are finally within the price range of the average new vehicle (relatively). What’s more exciting for fans of EVs is the fact that the production and development process is still in its early stages for most automakers.

Once automakers master the electric vehicle production process, can avoid recalls, and maintain healthy margins, price wars will drive prices down enough for EVs to be more affordable. We’re already seeing the impact of a price war with electric vehicles like the Tesla Model Y and Ford Mustang Mach-E. Chevrolet is scrapping its electric SUV in favor of the Equinox EV (with a new Ultium platform).

Most of the major players are already on the board, and the next few moves will change transportation as we know it. Automakers can easily sell over a million small electric SUVs in the United States in 2023 based on current Model Y sales numbers. The Tesla Model Y base model’s starting price is incredibly affordable when the tax incentive is factored in. The conditions are perfect for an EV takeover.

What are the most impactful electric vehicles on the market?

The Tesla Model Y, Volkswagen ID.4, and Ford Mustang Mach-E are, respectively, some of the most impactful electric vehicles on the market. The Model Y has taken over the world and is even outselling the Toyota RAV4. The Volkswagen ID.4 provides great value and has made huge strides in Europe.

Ford’s first-ever electric vehicle, the Mustang Mach-E, is capturing the hearts of consumers despite experiencing some reliability issues. Ford also produces the Ford F-150 Lightning electric pickup truck, which took the country by storm (no pun intended).

General Motors is responsible for producing the Chevy Bolt EV, which was extremely popular until its battery overheating debacle. Hyundai Motor Company’s Ioniq 5 small SUV won plenty of awards and set the stage for its Ioniq 6 electric sedan. There are plenty of impactful EVs on the market, but thus far, Tesla and Volkswagen are responsible for a large percentage of the global EV market share. According to data compiled by PBS, battery electric vehicle market share has skyrocketed from 2021 to 2022.

What’s next for EVs?

The electric future is here. Just a few years ago, it seemed like a world where EVs were ubiquitous was lightyears away. Charging infrastructure is evolving. Electric vehicles are becoming cheaper than ever before. Initially, when automakers pledged to electrify at least 40% of their portfolios by 2030, it seemed like an impossible task.

The next few years will introduce some of the most impactful electric vehicle nameplates in history. Who knows how popular obscure models like the Volkswagen ID. Buzz or Tesla Cybertruck could become. We’ll just have to wait and see.