‘Incredible deals’: Why now is the best time to buy an electric vehicle
Ivan Drury was stunned when he found out how much his aunt was paying for a lease on the electric Honda Prologue SUV.
Drury, director of insights for Edmunds, tracks sales of electric vehicles closely. When his aunt inquired about leasing one, he replied with an emphatic “yes.”
The next day she returned home with the Prologue. Her monthly payment? $250.
“There are killer deals out there, to say the least,” Drury told ABC News. “If you’re contemplating getting an EV, just do it.”
The number of Americans who have swapped their internal combustion vehicles for a battery-electric one is growing, though at a slower rate than the industry had originally expected. Range anxiety, reports of batteries exploding and rapid battery degradation have “curbed the enthusiasm” for EVs, Drury noted, adding that consumer negativity toward electrics has boosted interest in traditional gas hybrids and plug-in vehicles.
Americans looking for bargains and the latest tech, however, can find what they need in an EV, Drury argued. Plus, the federal tax credit of up to $7,500 expires on Sept. 30, meaning prices could rise later this year, he said.
“Chevrolet Equinox EVs are a steal,” Drury pointed out. “Mercedes has been making huge price adjustments on its high-end EVs. Last year electric vehicles sat on the lot for 98 days. There are so many incentives stacked on top of each other from dealers.”
The Inflation Reduction Act of 2022 limits which electric models qualify for the federal tax credit, though consumers who choose to lease versus buy an EV could still walk away with the full $7,500 amount. According to Cox Automotive data, 57% of EVs were leased in May compared to 22% for the overall industry. The tax credit was rescinded as part of President Donald Trump’s sweeping tax reform and spending package that was signed into law this summer.
Stephanie Valdez Streaty, a director at Cox Automotive, said more than 130,000 EVs were sold in July, the second highest volume ever. The upcoming credit expiration was directly responsible for the record sales, she said, adding that August and September will post similar, if not higher, numbers. Nearly every automaker benefited from the EV buying spree, she added.
“Cadillac did so well, Volkswagen was up hugely,” she said. “BMW saw sales up 24% in July versus June, Porsche was up 16.5%. This is a buyer’s market now.”
John Roth, Cadillac’s global vice president, said he was confident consumers would still seek out luxury EVs after the Sept. 30 deadline.
“We have said that the recent changes to federal incentives may lead to a short-term slowdown in overall EV sales,” Roth told ABC News. “However, 90% of luxury EV buyers today say they intend to purchase another EV, suggesting the impact could be less significant in the luxury segment. When you build the right EV, a Cadillac EV, customers will seek out your brand and make an informed purchase decision. This remains our approach no matter the propulsion system.”
Lucid, a luxury EV maker that builds its vehicles in Arizona, will continue to honor the $7,500 tax credit for owners of its new Gravity SUV until year-end.
“This was our decision,” Marc Winterhoff, interim CEO of Lucid, told ABC News. “Some Gravitys will only ship in Q4 and we don’t want to frustrate customers.”
Like Lucid’s competitors, Winterhoff said sales of the Gravity and the company’s Air sedan have risen in recent weeks.
“The majority of our customers up until now have leased the cars,” he said. “It is understandable – we were only eligible for the lease version of the incentives, not the cash version. And people definitely took advantage of it.”
According to a recent survey from AutoPacific, 79% of “EV considerers” are aware of the tax credit, and “the impact of the repeal will no doubt be consequential as it effectively raises the cost of EVs significantly, making them less affordable to many interested shoppers.”
Robby Degraff, manager of product and consumer insights at AutoPacific, said automakers are “throwing money on the hood to get rid of these vehicles,” resulting in “insane” prices for EVs.
“People are rushing out to dealerships to take advantage of these deals,” he told ABC News. “If you’re on the fence about an EV, buy one ASAP. For a lot of people, it makes sense to upgrade to an EV.”
Degraff and Valdez Streaty agree that EV purchases will continue past Sept. 30, since consumers can still take advantage of state rebates. The real driver of EV sales, however, will be models that cost less than the average transaction price of $55,689.