Price Changes for Electric Vehicles
Recently, a significant trend in price drops across EV model lines has drawn praise and has fueled buying prospects for many consumers. When added to existing financial incentives, such as tax rebates and rising (again) gas prices, electric vehicles are more attractive than ever.
Earlier this year, Tesla’s dropped its prices by 20% on certain models and Ford cut prices on its Mach-e between $600 and $5900, depending upon the model.
Just this week, Tesla decided to cut the price for a Model S by another $5,000, bringing the entry model to $89,990. The price of the Model X SUV was lowered by $10,000, lowering the offer price for the entry model to $99,990.
Electric models have been criticized for displaying higher price tags than similar, gas-powered models. As material and production costs have declined, many automakers are reducing retail prices accordingly.
As a result, the cost differential is narrowing and added incentives are still available.
The Battery Issue
The largest driving force for material cost savings comes from battery modules. One-third of all new EV batteries use iron phosphate cells rather than lithium and cobalt-based batteries. Tesla has led this switch, and companies such as Ford and Volkswagen are following suit to reduce production costs.
The trade-off is that lithium batteries typically have better range, whereas iron batteries are cheaper, more durable, have longer life spans, and are easier to source. Curiously, this same debate occurred once before – during the first push for electrical vehicles over a hundred years ago.
Interestingly, the pace of innovation in the industry over the last year is not unlike the growth a century ago. Did you know this is the third EV push in modern history?
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