A new report finds that some popular electric and hybrid vehicles in the United States are now selling for less than MSRP, indicating that demand for coveted electric vehicles may be declining. In the topsy-turvy world of new-car buying, MSRP or close to it is virtually a discount.
According to Automotive Research and listing site iSeeCars.com, 20 new models are priced within 2% of the manufacturer’s suggested retail price (MSRP), although prices are generally higher. Of those models, six are priced below MSRP, and four are electric or hybrid vehicles: Chrysler Pacifica Hybrid, Ford F-150 Hybrid, Hyundai Ioniq 5, and Hyundai Ioniq 6.
“It tells us that four out of six cars priced below MSRP are hybrid or electric,” iSeeCars executive analyst Carl Brauer said in the report. “We know that the Inflation Control Act removed a $7,500 credit for the Ioniq 5 and Ioniq 6 because they are not built in the US. This greatly affected their sales and, apparently, forced dealers to price them aggressively. Stable gas prices also did relatively over the past several months has reduced interest and demand for hybrids such as the Pacifica and F-150.”
Interestingly, in the top 20, five other EVs trade slightly above MSRP – the Volvo C40 Recharge (0.1%), the Kia EV6 (1.1%), the Volvo XC40 Recharge (1.3%), and the Cadillac LYRIQ ( 1.8%), and the Volkswagen ID 4 (1.9%). Similar to the aforementioned Hyundais Brauer, Kia EV6s and Volvos are also excluded from the EV tax credit, which indicates that dealers have to attract buyers at or near the MSRP.
The last time iSeeCars ran the study, in February, only three new models were priced below MSRP—and only one was an EV—the Cadillac LYRIQ.
ISeeCars examined 13 million new cars in June and found that overall new car prices rose 7.4% from a year ago, to $42,265. Furthermore, the dealer’s average listing price was $46,265 — or $4,000 over MSRP — meaning dealers were in for an 8.5% increase over MSRP.
With some electric and hybrid vehicles entering below the MSRP, that suggests demand may be slipping for those cars in the US, given that electrified cars are generally more expensive than their gas-only counterparts. Just this month, Ford announced price cuts for its small Lightning EV by up to $10,000, and earlier in the year it announced price cuts for the Mach-E EV SUV. Ford’s move with the Mach-E came in response to EV pioneer Tesla’s massive price cuts to its popular Model Y SUV and Model 3 sedan.
In fact, Ford lowered its goal for electric vehicle production, and now plans to achieve a production run rate of 600,000 EVs by the end of 2024, as opposed to this year. Even so, the automaker is still raising its earnings guidance, buoyed by its traditional gas-powered vehicle portfolio and strong demand for new vehicles.
“We are seeing some slight moderation, but the average new vehicle asking price is still 8% above MSRP, underlining continued strong demand for new cars,” said Brauer of iSeeCars.
Pras Subramanian is a correspondent at Yahoo Finance. You can follow it Twitter and on Instagram.
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