US EV sales are surging as prices dip and automakers pile on record incentives to clear out inventory before the $7,500 EV tax credit vanishes, according to Kelley Blue Book’s latest numbers.
The average price for a new EV in July was $55,689, down 2.2% from June and 4.2% lower than a year ago. Leading the price drop was Tesla, which averaged $52,949 last month, down 2.4% from June and a hefty 9.1% year-over-year.
Tesla sweetened the deal with bigger incentives in July, which helped boost sales compared to June, though they still trailed last year’s numbers. A higher share of the more affordable Model 3 and Model Y also helped push Tesla’s average price down.
Across the industry, EV incentives hit their highest level ever, averaging 17.5% of the vehicle’s price – a more than 40% jump from last year. Automakers and dealers have been racing to move EVs before federal incentives expire on October 1.
The strategy is working. Cox Automotive says July EV sales topped 130,000 – up 20% year-over-year – making it the second-strongest month for US EV sales on record.
Stephanie Valdez Streaty, senior analyst at Cox Automotive, said, “The urgency created by the [Trump] administration’s decision to sunset government-backed, IRA-era EV incentives was expected to create serious demand for EVs in the short term. If last month is any measure, Mission Accomplished. July sales were near an all-time monthly record. At this pace, Q3 will be the best ever and then some, as buyers jump in before the big incentives dry up.”
Read more: EV deals are heating up – buyers now save over $8K on average
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