A new report finds that some popular EVs and hybrids in the US are now selling below MSRP, suggesting demand for sought-after electrified vehicles may be slipping. In the upside-down world of new-car buying, at or near MSRP pricing is considered almost a discount.
According to automotive research and listing site iSeeCars.com, 20 new models are priced within 2% of the manufacturer’s suggested retail price (MSRP), despite higher prices overall. Of those models, six are priced below MSRP, and four of those are EVs or hybrids: the Chrysler Pacifica Hybrid, Ford F-150 Hybrid, Hyundai Ioniq 5, and Hyundai Ioniq 6.
“It’s telling that four of the six vehicles priced below MSRP are hybrids or electrics,” iSeeCars executive analyst Karl Brauer said in the report. “We know the Inflation Reduction Act removed the $7,500 credit for the Ioniq 5 and Ioniq 6 because they aren’t built in the US. This dramatically impacted their sales and, apparently, forced dealers to price them aggressively. And relatively stable gas prices over the past several months has reduced interest and demand for hybrids like the Pacifica and F-150.”
Interestingly enough, in that top 20 there are five other EVs trading only slightly above MSRP — the Volvo C40 Recharge (0.1%), Kia EV6 (1.1%), Volvo XC40 Recharge (1.3%), Cadillac LYRIQ (1.8%), and Volkswagen ID.4 (1.9%). Similar to the Hyundais Brauer mentioned, the Kia EV6 and the Volvos are also excluded from the EV tax credit, suggesting dealers had to entice buyers with at or near MSRP pricing.
The last time iSeeCars conducted the study, in February, only three new models were priced below MSRP — and only one was an EV — the Cadillac LYRIQ.
ISeeCars examined 13 million new car listings in June, and found that overall new car prices increased 7.4% from a year ago to $42,265. On top of that, the average dealer listing price hit $46,265 — or $4,000 above MSRP — meaning dealers were tacking on a 8.5% markup over MSRP.
With some EVs and hybrids coming in below MSRP, it suggests demand may be slipping for those cars in the US, considering electrified vehicles are generally more expensive than their gas-only counterparts. Just this month Ford announced price cuts for its Lightning EV pickup of as much as $10,000, and earlier in the year announced price cuts for its Mach-E EV SUV. Ford’s move with the Mach-E came in response to EV-leader Tesla’s massive price cuts of its popular Model Y SUV and Model 3 sedan.
In fact, Ford reduced its target for EV production, planning now to achieve a 600,000 EV production run rate by the end of 2024, as opposed to this year. That being said, the automaker still lifted its profit guidance, powered by its traditional gas-powered vehicle portfolio, and still-strong demand for new cars.
“We’re seeing some slight moderation, but the average new car asking price is still more than 8% above MSRP, confirming strong ongoing demand for new vehicles.” iSeeCars’s Brauer said.