A new study by JD Power suggests that electric vehicles are gaining traction, thanks to a combination of lower prices and attractive financing options. The average cost of new EVs continues to decline due to the introduction of more affordable models and industry-wide discounts. This trend has brought the price of EVs closer to their gasoline-powered counterparts, according to the report.
The JD Power EV Index, which compares the cost of EVs to gas-powered vehicles, reached a record-high score of 56 out of 100 in July. This marks the fifth consecutive month of improvement in the index’s parity score. While interest in EVs is at a yearly high, with 28% of new-vehicle shoppers expressing a strong likelihood of considering an electric vehicle for their next purchase, the industry still faces challenges in attracting more buyers compared to last year.
According to Elizabeth Krear, Vice President of JD Power’s Electric Vehicle Practice, the increase in EV availability could have played a role in the 28% figure, but she believes pricing is the primary driver. Incentives have aligned prices in popular compact and midsize segments, making EVs more affordable for a wider range of consumers. From a cost of ownership perspective, both mass-market and premium battery electric vehicles (BEVs) are now comparable to or even surpass their gas-powered alternatives.
Another factor contributing to the growing interest in EVs is the expansion of charging infrastructure options. Consumers highlighted the availability of Tesla’s Supercharger network for brands like Ford and Rivian as a significant factor in their EV purchase decisions.
JD Power predicts that U.S. automotive sales will reach 1.4 million in August, an increase of 4.2% year-over-year. The report forecasts lower prices for both EVs and traditional automobiles. The increasing availability of electric SUVs and pickup trucks is also expected to drive sales, with these vehicle types projected to make up 80% of new vehicle retail sales in August.
The latest JD Power report could be particularly beneficial for Tesla, as the company’s vertical integration strategy has enabled it to reduce the cost of mass-produced EVs. Traditional automakers like Ford and General Motors have faced challenges in achieving profitability with their EV offerings. Ford recently announced the cancellation of a new electric SUV project and the postponement of an electric pickup truck from 2026 to 2027, citing a need to reduce costs.
The automotive industry, including both EV companies and traditional automakers, is navigating a delicate balance between making EVs affordable and controlling costs to achieve profitability. The JD Power survey indicates that demand for EVs could be stronger than anticipated in the coming year if incentives remain in place and costs continue to decline.
