Tesla price cuts spur dealer discounts and manufacturer incentives on other EVs
When one carmaker controls over 60% of the EV market, any price changes can reverberate through the industry. In this case, Tesla’s steep price cuts combined with gaining access to federal tax credits have sent shockwaves through the industry. Let’s take a look at the first price drops from legacy automakers…
According to KBB, the average transaction price of a new electric vehicle sold in January was $58,725. That’s a 5.4% drop since December, sparked by Telsa’s massive price cuts. Most notably, the Model Y starting MSRP plummeted by five figures, from being thousands of dollars over the average EV transaction price last year to thousands under, now as low as $51,990 for the sporadically available standard range version. Naturally this had a profound effect on its competition, and below is a summary of EV deals we discovered while updating our Electric Vehicle Price Guide and Electric Vehicle Lease Guide.
Even though they publicly said otherwise, Volkswagen and its dealers were relatively quick to respond to Tesla’s price cuts, and for good reason. With trim levels and drivetrain configurations ranging from $38,995 for a rear-wheel-drive ID.4 Standard to $55,245 for an all-wheel-drive ID.4 Pro S Plus, prospective VW customers now have two luxury-branded EVs entering their trade space: the Model Y, an all-wheel-drive with more cargo space that is nearly identically priced with the high end of the ID.4 price range, and the rear-wheel-drive configuration of the Model 3, which at $41,490, costs less than a comparably equipped rear-wheel drive ID.4 Pro. VW hasn’t lowered their MSRP yet this year like Ford did on its Mustang Mach-E, in fact its last price move was in late December – a $1,500 increase that likely caused many ID.4 reservation holders to forego their opportunity to order a 2023 model (myself included). However, unlike other EV manufacturers, VW quickly rolled out a factory lease offer that passes the entire $7,500 federal EV tax credit to the consumer. Its lease terms are $649/month for 36 months with $3,999 due at signing, 10K miles/year for a 2023 all-wheel-drive ID.4 Pro S, which computes to an average monthly cost of $735/month before tax and license. That’s about $40/month cheaper than Tesla’s lease on a Model Y Long Range.
VW dealers across the country are now offering discounts, some of them substantial, on the ID.4. Topping the list of discounts on 2022 and 2021 models is VW of Perrysburg in Ohio with a $4,108 discount on a 2022 AWD Pro S, followed by VW of Fall River in Massachusetts with $3,000 off on a 2021 rear-wheel-drive Pro S and Cardinale Way VW in Southern California with a $2,000 discount on a rear-wheel-drive 2022 Pro S.
For those that qualify for the $7,500 federal EV tax rebate and don’t want to lease, buying the Chattanooga-built 2023 ID.4 should be more attractive than buying a discounted 2022 or 2021 despite the 2023 model’s higher MSRP. Brooklyn VW in New York has the best deal on a 2023 with a $3,000 discount on an all-wheel-drive Pro S, followed by VW of Fall River in Massachusetts with $2,020 off on an all-wheel-drive Pro S and Peoria VW in Arizona with a $1,500 discount on a rear-wheel-drive Pro S. Check for VW ID.4 deals in your area.
Like VW, Kia has not reduced MSRPs on their EVs in response to the Tesla’s price cuts yet, but it did improve lease terms on the EV6 somewhat. A 2023 EV6 all-wheel-drive in Wind trim with a $53,925 MSRP can be leased at $754/month for 36 months with $2,754 at signing, resulting in an average monthly cost of $810/month plus tax and license. That’s $37/month more than a Model Y Long Range lease even though the Model Y stickers for almost $1,000 more than the EV6. Settling for the less-expensive rear-wheel-drive EV6 Wind (MSRP $48,700) drops the average monthly cost down to $713/month, which is $60 less than the aforementioned Model Y lease. Kia has been ratcheting up its EV6 lease incentive, now at $2,700, but it continues to bogart a lion’s share of the $7,500 federal EV tax rebate rather than passing it all to the consumer, which results in lease terms that are less than favorable when compared to the competition.
Fortunately for the consumer, many Kia dealers have ditched the exorbitant markups of yore in favor of attractive discounts. Best discount we found is an EV6 Wind AWD priced at $5,700 below MSRP at Kia Store Anniston in Alabama. Next best is from Ron Tonkin Kia in Oregon, with a $3,250 discount on a rear-wheel-drive EV6 Wind. Kia of Irvine and Car Pros Kia of Glendale, both in the hot Southern California EV market, round out the best discounts on an EV6 with markdowns of $3,010 and $3,000 respectively. Find Kia EV6 deals near you.
Kia Niro EV
Frankly, the new-for-2023 second-generation Kia Niro EV seems a bit overpriced for today’s market. Besides overlapping with rear-wheel-drive versions of upscale EVs such as the Kia EV6, Hyundai Ioniq 5, and now the Tesla Model 3, the Niro EV MSRP ($39,550 to $44,550) is also thousands of dollars more than similar front-drive EVs with over 200 miles of range – namely the Chevrolet Bolt EUV, Hyundai Kona Electric, and Nissan LEAF SV Plus. So it’s no wonder that there are Kia dealers that are discounting it so soon after its debut. Largest discounts below MSRP we found are at Ron Tonkin Kia in Oregon ($5,973) and Crowley Kia in Connecticut ($4,860), followed by SoCal dealers Kia of Irvine ($3,590), and Car Pros Kia of Glendale ($2,700).
As far as leasing, Kia recently reduced the monthly payment on its lease offer by $40/month. The terms are now $379/month for 39 months with $3,999 due at signing, for an average monthly cost of $472/month before tax and license, which is only $10/month more than Chevrolet’s Bolt EUV lease. Car Pros Kia of Huntington Beach in Southern California is one dealer that is advertising lease terms that beat the factory offer – $349/month for 39 months with $2,999 due at signing – which works out to an effective cost of $423/month before tax and license. The fine print in the ad lists stock numbers to which the lease special applies, including a few Niro EVs at the Car Pros dealers in Glendale and Moreno Valley. Look for Kia Niro EV deals in your locale.
Nissan Ariya: This all-new, long-awaited crossover finally started arriving at dealerships in significant quantities last month, just as Tesla dropped the price of the Model Y by $13K. Inventory has ballooned in the past several weeks and some dealers are offering discounts over and above Nissan’s $1,240 “Reservationist Private Offer.” Nissan of Lewisville in Texas is taking $3428 off MSRP on an Ariya Evolve+, while Wesley Chapel Nissan in Florida is discounting an Ariya Engage by $1,000. We even found one dealer the San Francisco area – Concord Nissan – offering a $939 discount on an Ariya Engage. Nissan hasn’t published a factory lease offer yet, but we did find one dealer – Tustin Nissan in California – offering a $0 down, $599/month, 18-month lease on an Ariya Engage priced at $44,735. Look for Nissan Ariya deals near you.
Hyundai Kona Electric: The 2023 Kona Electric can be leased for an average monthly cost of only $382/month, which is currently the cheapest factory lease offer on an EV in the nation. A few dealers are offering discounts from MSRP, including Hyundai San Luis Obispo in California ($2,005 off), Atlantic Hyundai in New York ($1,761 off), and Ourisman Hyundai Laurel in Maryland ($886 off). Most Hyundai dealers are also advertising a Hyundai-backed $750 incentive packaged with low-APR financing, which sweetens the deal a little more. Check local dealers for Hyundai Kona Electric deals.
Hyundai Ioniq 5: This past weekend, Hyundai finally decided to pass the full $7,500 federal EV tax credit to the consumer in its Ioniq 5 lease offer. Terms are now $539/month for 39 months, $3,999 due at signing on a rear-wheel-drive Ioniq 5 SE priced at $46,835. For those that don’t want to lease, Hyundai now has a $1,000 cash incentive on the purchase of an Ioniq 5. Find Hyundai Ioniq 5 deals near you.
Ford Mustang Mach-E: A few remaining 2021 and 2022 models in GT trim are being offered below MSRP at Metro Ford Miami in Florida ($5,449 off), Greenway Ford in Florida ($2,000 off), and Stanley Ford in Texas ($1,208 off). 2023 inventory is growing, and many dealers are now offering what they have in stock at MSRP. Look for Ford Mustang Mach-E deals in your area.
Ford F-150 Lightning: A number of dealers are unwinding massive markups on remaining 2022 models in Lariat trim which, at MSRP, is $7,000 less than a 2023 Lariat. We even found a few discounts: Ford of Branford in Connecticut has a 2022 Lariat at a $2,023 discount, and Chapman Ford in Pennsylvania has a 2022 Lariat at a $1,522 discount. Stanley Ford in Texas doesn’t have a 2022 Lariat, but it does have a top-of-the-line 2022 F-150 Lightning Platinum priced $4,207 below MSRP at $89,997, which should be about $10,000 less than a similarly equipped 2023 model. Find a 2022 Ford F-150 Lightning near you.
Tesla Model Y Standard Range: Yeah, this is the elephant in the room, so I saved it for last. Can’t order it right now, so if you want the least expensive, no-options example of this $51,990 gem, you’ll have to check Tesla’s immediately available inventory at least daily and plunk down a non-refundable $250 fee as soon as it pops up. If you don’t mind paying $2,000 more for big rims and need it in a color other than white anyway, you probably have a bit more time to decide since anything with options seems to hang around in inventory for another day or three, especially after the latest price hike (it actually appeared at $49,990 in January). Tesla’s current lease deal on this 279-mile configuration of the Model Y, even with the $2,000 rims and tires, is a relative bargain for a luxury-branded all-wheel-drive SUV at $523/month for 36 months, with $5,718 due at inception (including the $250 order fee), for an average monthly cost of $667/month before tax and license.
As always, check our Electric Vehicle Best Price Guide and Electric Vehicle Best Lease Guide for the best deals on EVs in the US.
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