- Automakers are dropping the prices of their electric cars in the hopes of boosting sales.
- Tesla has been slashing prices for months, and Ford just joined in with F-150 Lightning discounts.
It's never been a better time to be in the market for an electric car — but a worse time if you already bought one.
As more EV prices continue to be slashed, soon-to-be customers are better positioned than they were a year ago, but at the expense of those who were early adopters.
Tesla's price cuts have made headlines for months. Ford responded with a nearly $6,000 price cut off the Mustang Mach-E. And just this week, Ford cut F-150 Lightning electric pickup truck prices by up to $10,000 (after several price hikes over the past year).
"That has to feel like a slap on the face to some customers," Robby DeGraff, an analyst at AutoPacific, told Insider. "But you need to keep bringing down that price point for people to get into EVs."
Lowering EV prices will be a crucial part of boosting adoption of the cars, as the average EV sold for $53,438 last month (down from $61,000 in January but still higher than the average price paid for a gas-powered car.) Things are slowly improving as supply becomes more readily available, but a scramble for battery materials has caused inputs to remain stubbornly high
But rewarding some early adopters with a massive hit to their EV resale value isn't exactly the way to earn brownie points with those customers — who are largely, well-off, early-adopting consumers that automakers depended on to kick off their EV businesses. Unfortunately, that's just going to be how the cookie crumbles for some time.
EV resale values have plummeted overnight — with Teslas falling the most
Many Tesla buyers were concerned that their vehicles dropped in value by thousands of dollars overnight as a result of Elon Musk's tactics. EV resale values were already difficult to predict for a variety of reasons, but price cuts are throwing an additional wrench into the equation. So far, Teslas are leading the pack and seeing used prices sink the most, an iSeeCars.com estimate suggests.
Ford had to create a plan to refund its early Mach-E owners, many of whom had similar concerns that they lost value.
"Like any technology if you're early in the transition to it, you risk everything from quality and performance problems to pricing contractions and feeling like you overpaid," Karl Brauer, executive analyst at iSeeCars.com, told Insider. "There are going to be people who are unhappy about this."
It's possible some shoppers will hold off on their electric car purchases, either in anticipation of further cuts or because trust was lost in a certain brand due to concerns their vehicles won't retain value, experts say.
Things could get even worse when it comes to trucks
These dynamics might worsen as Tesla's lead continues, especially as it enters the truck space with the Cybertruck.
"The resale value of an F-150 Lightning is going to be more impacted by how well the Tesla Cybertruck does in the market when it starts getting delivered in the next few months," Scott Case, Recurrent CEO, said via email. "There's a big moment coming for the pickup truck makers — can they hold off Tesla from owning that category as well?"
Have you bought an electric vehicle and its price dropped after? Are you planning to buy an EV that has undergone recent price cuts? Do you have a tip or opinion to share? Contact this reporter at astjohn@insider.com.