Vehicle sales prices have risen by about $10,000 since the start of the pandemic, according to Cox Automotive data, and that upswing is pricing many middle-income buyers from the new vehicle market. Add to that newly rolled out, more expensive technology of electrification and that pushes new vehicle prices higher.
The Biden administration, in laying out its vision for a transition to electric vehicles, tried to tackle this issue in the planning phases.
Auto makers, likewise, are trying to keep purchase costs reasonable, according to Jonathan Weinberger, General Motors Co.'s chief advocate and director of global transportation technology policy.
"We want to make the accessibility of EVs as easy as possible, too," Weinberger said. "We have two EVs — the Bolt and the Bolt EUV — that are sub $30,000. The Equinox is another one. The average price of a car is about $45,000 so we want to be below that. We want them to be accessible."
For the most part, though, consumers are going to pay more for an electric vehicle—particularly in the highly sought after SUV and pickup segments.
"Right now, if you look across the whole industry — at the models available in the U.S. — and compare as much as you can apples to apples — a compact car to a compact car, a pickup to a pickup — the electric models tend to be a little bit more expensive," Searle said.
The good news is that, as auto makers transition production to ramp up the manufacturing of electrified models, the cost of a new electric vehicle is likely to come down—or at least begin to match the cost of new a vehicle with an internal combustion engine.
In fact, Searle said, give it just about 10 years.
"We expect to reach purchase cost parity — (where it is) cheaper to buy an electric model — come before the end of the decade for cars and a few years later for SUVs and pickups," Searle said.