Electric vehicles are poised to take over the global car market as they provide drivers with a cleaner alternative to gas-powered cars. That being said, a big issue with EVs right now is their prices, and many EVs are priced like they’re luxury cars which makes them unaffordable to the average American. The good news is that EVs are also poised to become cheaper with time, and in fact, EV prices have already dropped by a significant amount this year.

Tesla started it all, both in terms of the EV market and the recent price drops

As many drivers know, although Tesla did not invent EVs, the company was the first to popularize EVs in America in the modern age. There were a lot of factors that explained why Tesla became so successful so quickly. One of the main reasons, however, was the fact that the company introduced two EVs that were designed for the mass market, the Model 3 and the Model Y.

Both Teslas were designed to be mass-produced and relatively cheap, but due to a variety of issues, their prices skyrocketed in recent years. It wasn’t that long ago that the Model Y was being sold in the $60,000 range. But as the supply chain issues eased, production ramped up, and Tesla saw it as a good opportunity to cut prices. Now, the base Model Y is available for about $47,000.

That caused a chain reaction in the rest of the EV market. The reason for that was simple. The Model Y is the most popular EV in America right now, and its price cuts made it even more attractive for EV shoppers. As a result, a lot of automakers have cut prices on their EVs to compete. That being said, those automakers were struggling with supply chain issues like Tesla was, so there were other reasons why they decided to cut their EV prices.

Here’s how much EV prices have dropped this year so far 

Across the board, new EV prices have dropped by about 20% compared to last year, and that has also translated to price cuts in the used EV market, according to Ford Authority. Just like with gas-powered cars, as new EV prices drop, car shoppers flock to the new EV market, which forces the used EV market to cut prices as well.

Compared to last year, the used EV market saw a 28% drop in prices. For comparison, the entire used car market only saw a 4.2% drop in prices. This means that compared to the average used car, a used EV saw its price decline by over seven times more. While these are some big percentages, car shoppers don’t really care about the percentages so much as they care about the dollar signs. 

EV prices still have a ways to go before the majority of Americans can afford one

What that ultimately means is that although EV prices have dropped by a lot, the actual price tags of many EVs are still too high for Americans. For example, the Tesla Model Y may be very popular in America after its price cuts, but drivers aren’t buying base models of the Tesla SUV. A Long Range version of the Model Y goes for about $55,000, and the Performance version is $59,000.

For the average American, those are luxury car prices, and it’s a similar story for even the base Model Y. Many Americans rely on cheap beaters or used cars that cost a fraction of the Model Y’s price tag. Until EV automakers can cut prices to much lower levels, it will be a while before the majority of Americans can drive an EV.