EV affordability gap shrinks, buyer interest grows

A surge in affordable EV trims and new products has given 55.7% of mainstream car buyers a viable EV option, according to J.D. Power’s June E-Vision Intelligence report. 

Why it matters: EVs are becoming a more realistic option for everyday drivers as the affordability gap shrinks.

• The average mainstream EV is now just $1,500 more than its gas-powered counterpart. This is down from a hefty $8,400 difference in May 2023. 

• In some cases, EVs are even cheaper. For example, the Ford F-150 Lightning (with tax credits) undercuts the gas-powered F-150 by $5,073.

Key quote: “With more options at competitive affordability, it begs the question, ‘Why is the pace of EV sales flat and what is the satisfaction and future intent of current EV owners?’" said Elizabeth Krear, VP of J.D. Power’s EV practice.

By the numbers: U.S. new vehicle sales edged up just 0.1% in Q2 compared to last year, despite larger discounts and slightly lower prices. 

• EV market share also remained stagnant for the past three months, making up 8.4% of total sales. 

• But consumer interest is rising. 59.5% of new-car shoppers now say they'd consider an EV. That's up from 58.2% in April. But, interest hasn't reached the highs seen in late 2023.

The tipping point? Expensive luxury EV models led the market at first. But, now they are being challenged by a wave of affordable, mainstream EVs for everyday drivers. And as price disparities continue to decrease, this could be the push would-be EV buyers need to enter the market. The focus will then turn to the driving experience and ease of charging. These could be the true differences that win over EV consumers in the long run.

Automakers with EV wins in Q2:

• Ford: Sold 23,957 EVs in Q2, up 61% from Q1 2024. This jump was driven by the Mustang Mach-E (7,902 units), the F-150 Lightning (15,645 units), and the E-Transit (3,410 units). So far this year, the automaker has sold 44,180 EVs, up 72% year-over-year.

• GM: Delivered 21,930 EVs in Q2, up 40% from Q2 2023, fueled by models like the Cadillac Lyriq (sales up 441% YoY). Yet, EVs still make up a small part of their overall sales (3% in Q2).

• Hyundai: The IONIQ 5 achieved a new Q2 record of 11,906 units sold, a 51% increase year-over-year. The new IONIQ 6 set its own Q2 record with 3,266 models sold (up 8% YoY). Overall, Hyundai's EV sales climbed 15% in Q2.

• Toyota: Total sales of hybrid and electric vehicles combined were 247,347 units in Q2 (up 63% YoY). Hybrid and electrified vehicles made up 40% of the brand’s total Q2 sales.

• Tesla: Still the leader by a wide margin, delivering a total of 443,956 vehicles in Q2. Tesla's total EV sales actually declined slightly (down 4% YoY) compared to Q2 2023, yet reflected a 15% increase from Q1 2024.

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