For the past few years, electric vehicles have sold for about $10,000 more than combustion-powered counterparts on average. That’s not good for the consumer, and it’s not helping EV adoption. However, the market is changing. In 2023, you CAN negotiate electric car prices, at least for some of the most popular models. Here’s where the market stands in 2023, and how to negotiate a better price when you head to the dealership to buy your next EV.
The EV Market in 2023 – Prices, Inventory and Demand
The worst of the supply shortage is well behind us, and the legacy automakers are busy playing catch-up. It’s not all about Tesla anymore. Mainstream automakers like GM, Ford, Toyota and Honda are introducing their own budget-minded EVs in 2023 and 2024. On top of that, EV tax credits were recently revamped to remove the previous sales cap. As long as prices remain eligible, even the best-selling Tesla models now qualify for $7,500 in federal EV tax credits.
Demand for electric vehicles remains high, and more than two-thirds of American drivers are at least somewhat interested in owning an EV in the future. What’s changing is the supply of new and used EVs on the market.
Little by little, electric vehicles are becoming a mainstay on dealer lots. Five years ago, Tesla, Chevrolet and Nissan were the few known for their electric offerings. Today, every automaker has jumped on the electric bandwagon.
Here’s a look at the top selling EVs in America in 2022:
1. Tesla Model Y – approx. 252,000 sold; Starting price: $54,990
2. Tesla Model 3 – approx. 211,641 sold; Starting price: $43,990
3. Tesla Model S – approx. 42,000 sold; Starting price: $94,990
4. Ford Mustang Mach-E – 39,458 sold; Starting price: $48,995
5. Chevrolet Bolt – 38,110 sold; Starting price: $26,500
6. Tesla Model X – approx. 24,000 sold; Starting price: $120,990
7. Hyundai IONIQ 5 – 22,982 sold; Starting price: $41,450
8. Volkswagen ID.4 – 20,511 sold; Starting price: $37,495
9. Kia EV6 – 20,498 sold; Starting price: $48,700
10. Rivian R1T – 20,332 sold; Starting price: $73,000
It doesn’t end there. Toyota, Subaru, Volvo, Mercedes-Benz, BMW, Cadillac, GMC and Audi all have popular EVs on sale today. By 2024, Honda and the Stellantis family of brands will finally join them. Simply put, there are A LOT more EVs to choose from in 2023.
Electric car prices remain higher than the overall industry average. The average new EV sold for $58,725 in January 2023, according to Kelley Blue Book. That’s over $9,000 more than the overall average new car price of $49,388. That’s actually an improvement over where EV prices were about one year ago when the average transaction price was about $64,000.
So yes, electric cars, SUVs and trucks remain expensive overall. However, for the determined and knowledgeable buyer, savings can be had when negotiating EV prices. Let’s dig into the details.
Can you negotiate Tesla prices?
Are you shopping new or used? You can’t negotiate prices for a new Tesla Model Y or any other new Tesla. That’s because Tesla sells direct-to-consumer (learn more about the trend toward DTC sales here). The price you see on tesla.com is the price you pay.
Buying a used Tesla is an entirely different story.
Tesla commands two-thirds of the EV market in America. So when Tesla discounts new models, the effects will spread throughout the new AND used EV markets soon after. In January 2023, Tesla’s average transaction prices decreased $5,440, down 8.4% month over month and down 5.5% year over year. When Tesla discounted prices in an effort to qualify for federal tax credits, orders for new Teslas soared. Tesla sales in January increased year over year by more than 30%.
The result is much more affordable NEW Tesla models, and a glut of used Tesla cars on the market. Fewer buyers are opting to buy used at a time when brand-new Tesla models are heavily discounted. Consequently, the market for used Tesla EVs has crashed. You can most definitely negotiate a better deal on a used Tesla today.
Long gone are the days of used Teslas selling for more than new ones.
Caution! Here’s what you NEED to know when buying a used Tesla
Before heading to the dealership to negotiate a used Tesla, prepare for the messy market in 2023. Here’s what you need to keep in mind when pursuing a deal on a used Tesla:
- The dealer may be stuck in 2022. Don’t expect your salesperson to know that Tesla dropped Model Y prices by up to 13% and Model 3 prices by several thousand dollars. There’s also a real chance that they could be pretending to be unaware of the recent price drops. Dealers WILL try to sell their used Tesla inventory for more than the cars are worth, because there’s a good chance that they’re losing money on them.
- Don’t expect the dealer to be a tax credit expert. The used EV tax credit is ONLY for vehicles under $25,000. In other words, no used Tesla will qualify in 2023. Prices haven’t dropped THAT far. Do your homework before negotiating a deal. Here’s the latest from the IRS on exactly how the new EV tax credit works.
- Used Teslas aren’t selling fast anymore. On average, used Teslas sat in dealer inventory for 50 days on average in November, compared with 38 days for all used cars. That was BEFORE the latest massive price cuts. Don’t let the dealer convince you otherwise. Use this as leverage when you negotiate.
- Work with a Car Coach to save the most. If you’re ready for expert assistance, the CarEdge team has EV specialists on staff ready to help you negotiate thousands of dollars off your car’s price. Get in touch with a CarEdge Coach today.
Yes, you CAN negotiate electric car prices.
Several factors make all EVs more negotiable in 2023, not just used Teslas:
- Supply is up: EVs remain popular, but you’ll no longer be fighting tooth and nail for the sparse electric vehicle inventory. From the budget-minded Chevy Bolt to the Hyundai IONIQ 5, most mainstream electric vehicles have more inventory now than ever before.
- Markups are ALWAYS negotiable: With inventory up and the EV market growing, don’t let anyone try to convince you that markups are acceptable. Our community has shown time and time again that EV markups can and should be removed.
- The Tesla effect: When Tesla slashed prices by up to $13,000, competitors took note. The Ford Mustang Mach-E was discounted shortly after, and budget-friendly EVs like the Chevy Bolt are holding prices where they are, after prior speculation that price hikes were on the way.
- There’s always something better: Electric cars are going through an extended period of rapid innovation. 2015’s latest and greatest EVs are mediocre today, and 2023’s most capable electric models will lose their sparkle when longer-range and faster-charging EVs arrive. Use this to your advantage. When negotiating an older model year EV, use this to your advantage.
- Tax credit winners and losers: If the EV you’re shopping for doesn’t qualify for the revised federal tax credit, use that as leverage to negotiate a lower price. In 2023, this includes the popular Hyundai IONIQ 5, Kia EV6, Nissan Ariya, as well as Audi and BMW electric models. Made-in-America EVs under the new price caps ($55,000 for sedans, $80,000 for trucks and SUVs) do qualify for the new EV tax credit. If the model you’re shopping for does indeed qualify, expect a tougher time when negotiating pricing.
Check out these success stories!
It’s understandable to be skeptical of deals on EVs. After what we’ve all been through back in 2022’s auto market, it’s fair to be weary of good news. But deals on EVs are attainable. The proof is in the pudding. Here are three recent success stories from the CarEdge community.
“Thanks to the guidance from CarEdge, I was able to get a 23′ Ioniq 5. I negotiated all of the dealer extras off of the out-the-door price and $4,000 off of the market adjustment. Could’ve gotten the SEL trim for under MSRP, but had my heart set on the Limited.
Really happy with CarEdge, it made all the difference. Hated to pay any market adjustment but the Limited trims are in pretty high demand with limited inventory so I felt good about it. Thanks crew!!”
– Eric, 2023 Hyundai IONIQ 5 Limited
“I purchased a new Kia EV6 from Sterling Kia in Lafayette, LA. I emailed the dealer the evening of 10/21 after hours inquiring if they had a Wind RWD available. Matthew called me the next morning stating the car was available. Before the end of the day, I purchased the EV6 at MSRP with no dealer add ons.”
– Howard, 2023 Kia EV6
“I called a dealer about a Chevy Bolt 2LT, that according to CarEdge’s VIN tracker has been on the lot for 3 weeks 🤯. Salesperson said no markup, $2500 in add-ons, but they said it was negotiable.
I came in and negotiated off all the options except for permaplate. They even gave me the California Clean Fuel rebate, which I wasn’t expecting since California said they paused that rebate.
I learned so much from the CarEdge Community. I came with a check-ready loan. They beat my APR by .1% 👍. I told them I would rather custom order without accessories, they said they would but I would have to wait. When I said I would wait, the manager took off that last option.”
– Stefan, 2022 Chevrolet Bolt
There are many more examples of great car price negotiation wins over at the CarEdge Community. In 2023, it’s totally possible to negotiate the price of a new or used EV, especially if you’re willing to learn negotiation tactics that are proven to be effective.
Check out this 100% FREE car buying cheat sheet. You’ll know exactly what to say at the dealership to keep your best interests front and center.
Have you had any luck negotiating EV prices in 2023? Let us know in the comments below or hop on over to the CarEdge Community. We’d love to hear from you.