KBB: Incentives Hit 7.3% in July as EVs Go Out With a Bang
Kelley Blue Book (div. Cox Automotive) reports the average factory incentive for a new vehicle sold in the U.S. last month was $3,553, or 7.3% of the average transaction price. Analysts also upwardly revised June’s figure to 7% from the previously announced 6.9%.
Strong, steady incentive spending has kept prices in check: July’s average transaction price (ATP) for a new gas or hybrid unit was $48,841, up 1.5% year-over-year but down 0.1% from the prior month.
New EVs cost an average of $55,689 in July, down 4.2% YOY and down 2.2% from June. Why? Cox Automotive Senior Analyst Stephanie Valdez Streaty credits EV affordability to a rush to beat new federal policies and a need to clear inventory. Incentives for fully electric units such as the Honda Prologue set an all-time record at 17.5% of ATP, a 40% YOY increase.
“The urgency created by the administration’s decision to sunset government-backed, IRA-era EV incentives was expected to create serious demand for EVs in the short term,” Valdez Streaty writes in a release. “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.”
Last week, J.D. Power and GlobalData reported incentive spending fell to 6.1% in July after ticking up in June.
