The high cost of lithium-ion batteries has long been a hurdle in the production and adoption of electric vehicles (EVs). Now, despite the fact that battery prices continue to increase, some auto companies have announced plans to introduce new, lower-cost EVs in an effort to attract a wider group of buyers.
EVs have long been seen as a luxury item, and not without reason. Tesla (NASDAQ: TSLA) is the top seller of EVs in the U.S., and its cheapest vehicle has a price tag of more than $48,000. On average, EVs in the U.S. cost $65,000. In comparison, the Toyota (NYSE: TM) RAV4, the top-selling non-pickup vehicle in the U.S., has a price of just over $28,000.
However, more and more manufacturers are introducing EVs in the thirty-thousand-dollar range. The Nissan Leaf (OTC: NSANY) and Chevrolet Bolt (NYSE: GM) are both under $30,000, and the Hyundai Kona Electric (OTC: HYMTF), Mini Cooper Electric (OTC: BMWYY), and Mazda MX30 (OTC: MZDAY) are all in the $30,000s.
On September 8, General Motors announced its plans to introduce the Chevrolet Equinox EV, a small SUV with a range of 250 miles per charge and a price near $30,000. The Equinox is expected to hit the market this time next year, and its exact price won't be announced until closer to its release.
"We think it's going to be one of the products that's really going to help that mainstream adoption really take off in the marketplace," Steve Majoros, vice president of marketing for Chevrolet, said of the Equinox.
Along with that lower price point, there is also some expectation that the Equinox will meet the strict requirements needed to make buyers eligible for the Inflation Reduction Act's EV tax credits, credits worth up to $7,500.
While GM has confirmed that the vehicles will be manufactured in Mexico, it won't say where the batteries will be made. GM recently announced a joint venture with LG Energy Solution to build three new EV battery factories in the U.S., but it may take some time for the company to adjust to the tax credit requirements.
"We're really working through the rules and the regulations right now," Majoros said. "We think it's all lining up nicely, but more details to come on that."
GM may be introducing affordable EVs, but EVs across the board are actually getting more expensive, according to data analyzed by iSeeCars. Only one EV on the market has seen a price decrease year-over-year in 2022, and the lowest-priced EVs have seen the most significant price increases.
In January, EV prices shot up 54% as high gas prices pushed up demand for non-gas-powered cars. Prices dipped for a short time in March, but soon rebounded and continued to rise.
Not only are EVs getting more expensive, but they're also outpacing the price increases of their gas-powered counterparts.