High Inflation is Affecting the Electric Vehicle Market

With prices rising across the auto industry, owning an electric vehicle has never been less affordable. Find out why electric vehicle inflation is so high.
Written by Elaine Duvet
Reviewed by Kathleen Flear
Aug 3, 2022
It’s hard out there for
car buyers
looking for
new battery-powered vehicles
. The switch to electric has never been harder. With Biden’s pledge for 50% of all vehicles sold in the U.S. to be electric by 2030, are we falling behind?
Jerry
, the
car ownership super app
, investigates how the electric vehicle market is suffering from rising inflation.

Inflation: Electric vehicles are more expensive than ever

Inflation continues to negatively affect the automotive industry. Even Tesla jacked up its prices by $6,000 in June. The electric R1T pickup from Rivian raised its sticker tag in March, and Ford followed suit by raising the price of the Mach-E. 
If you’re in the market for buying a new electric vehicle, you’re looking at $61,000 on average. Yikes. In fact, inflation has affected the asking prices of all types of cars to an average vehicle price of $46,000, according to
Bloomberg
But the majority of Americans can’t afford to buy a new car anyways, and purchasing an EV is now completely out of the question. Only a limited group of well-off drivers will have the opportunity to own what’s now considered a luxury
Last year, about 30% of new cars sold had a suggested price of $50,000 and above, which is around 6% more than it was 10 years ago. The electric car has become a product for the upper crust and slows down the electric vehicle revolution by a long shot. 

Why is electric vehicle inflation so high?

While we’ve come a long way with technology, electric vehicles are still pretty expensive to build. For instance, while Ford is launching its plug-in pickup, the F-150 Lightning, it’s also dropping $50 billion to roll out additional EVs. The automaker plans to manufacture 2 million electric vehicles by the year 2026. 
According to Bloomberg, “Rising raw-materials costs are rendering some battery-powered models unprofitable, the carmaker’s CFO John Lawler said at an investor conference this week.” Lawler also notes that Ford is witnessing an increase in auto loan delinquencies amid high-interest rates and rising inflation.
Even the CEOs of Toyota, Ford, Stellantis, and General Motors are scrambling. In the summer of 2022, they wrote to leaders in Congress, in hopes to waive the limits of the $7,500 federal tax credits. As you may know, Tesla and GM have been maxed out for quite some time, since the program has a 200,000-vehicle cap. Toyota isn’t far behind.
“Despite the recent surge in EV sales, automakers will need to sell to middle-class buyers both to reach cost-effective scale with batteries and to make a dent in carbon emissions,” Bloomberg tells us. That’s not an easy feat with a $61,000 average asking price.
GM stepped up to the plate, and dropped the price of its Chevrolet Bolt and the larger Bolt EUV by $6,000, partly because its credits expired. Next year, GM will offer the Chevy Equinox and Chevy Blazer for about $30,000. And hopefully, other automakers in the electric vehicle market will be inspired to do the same. 

Save money on car insurance

In the age of inflation, you’ve got to save money wherever you can. Did you know most Americans are overpaying for their car insurance policy every month? Don’t let that be you.
If you’ve got questions about your coverage, download the
Jerry
super app. The savings keep coming even after Jerry finds you great insurance at the lowest price. 
Before every policy renewal period, you’ll be presented with new competitive quotes, which means you’ll always have the best coverage at the best price. If you want to switch policies, it’s all good! Jerry can help cancel your old policy.
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