Learn about the latest trends in electric vehicles, including more affordable options and federal tax credits. Discover the top EVs under $40,000 with a range above 200 miles and how rebates can bring down the cost of new EVs.
Questions Answered in this Article
- Have electric vehicles become more affordable? Yes, on the whole, the average prices of EVs are approaching parity with those of gas-powered cars. Moreover, the lowest-priced EVs currently available offer features and specifications that would have been out of reach only a few years ago.
- Can rebates bring down the prices of new EVs? Yes, rebates can reduce the cost of new EVs. From 2023 to 2032, certain new EV purchases may be eligible for up to $7,500 in federal tax credits, which could reduce your tax bill by up to $7,500. However, not all EVs are eligible for the rebate, and factors like price, weight, battery size, and manufacturing location determine eligibility.
- What is the average price of new nonluxury cars, including electric vehicles? As of late 2022, the average price of new nonluxury cars, including electric vehicles, has spiked to $44,584.
- What are some EVs available for under $40,000? Several options are available if you’re looking for an EV that costs under $40,000. The EVs listed in the article all have a manufacturer’s suggested retail price (MSRP) of $40,000 or less, and each vehicle has a range above 200 miles, making them suitable for longer trips with fewer charging stops.
- How has the EV market changed in recent years? The EV market has seen many available models in recent years, and EV sales surged from 488,397 in 2021 to 809,739 in 2022. EV technology has also made significant strides, with many current models boasting ranges above 200 miles.
Electric Vehicles: More Affordable Options and Tax Credits for Budget-Conscious Car Shoppers
The positive trend is that with the growing popularity of electric vehicles, consumers now have more affordable options to choose from. However, according to Kelley Blue Book, the negative trend is that the average price of new nonluxury cars, including electric vehicles, has spiked to $44,584 as of late 2022. Coupled with rising interest rates, the average monthly car payment now exceeds $700. This means prospective EV buyers are caught amid two conflicting trends: an expanding selection of EVs at reasonable prices, but an overall average price rapidly increasing.
Growing Popularity of EVs and Rising Prices: Conflicting Trends for Car Buyers
Have electric vehicles become more affordable? Ten years ago, the Tesla Model S was the cheapest all-electric car in the US, starting at $52,400. Today, the Model S starts at $89,999, almost double the price. However, Tesla has since introduced the Model 3, which boasts a more extended range than the 2013 Model S and starts at less than $44,000.
This trend reflects the EV market, which has seen many available models in recent years. According to auto data company Cox Automotive, EV sales surged from 488,397 in 2021 to 809,739 in 2022. In addition to an increased variety of models, EV technology has made significant strides, with many current models boasting ranges above 200 miles. By contrast, in 2013, only a handful of EVs could travel more than 100 miles on a single charge.
While some EVs may still be beyond the reach of budget-conscious car shoppers, on the whole, the average prices of EVs are approaching parity with those of gas-powered cars. Moreover, the lowest-priced EVs currently available offer features and specifications that would have been out of reach only a few years ago.
How Federal Tax Credits Can Bring Down the Cost of New EVs
One way to reduce the cost of new EVs is through rebates. From 2023 to 2032, certain new EV purchases may be eligible for up to $7,500 in federal tax credits. Here are the key points to keep in mind:
To qualify for the rebate, your income must be below certain limits: no higher than $150,000 for individuals or $300,000 for married couples filing jointly.
The rebate is nonrefundable, meaning you won’t receive a refund check if the amount exceeds your tax bill. However, qualifying for the maximum amount could reduce your tax bill by up to $7,500.
Not all EVs are eligible for the rebate: factors like price, weight, battery size, and manufacturing location determine eligibility. The IRS maintains an index of qualifying vehicles.
Top EVs Under $40,000 with a Range Above 200 Miles: Suitable for Longer Trips
Several options are available if you’re looking for an EV that costs under $40,000. All the EVs listed below have a manufacturer’s suggested retail price (MSRP) of $40,000 or less, which is lower than the average price of a new car sold in 2022 ($44,584). Additionally, each vehicle has a range above 200 miles, making them suitable for longer trips with fewer charging stops – mainly if you don’t own a gas-powered car.
It’s worth noting that the price you pay at a dealership may differ from the MSRP. The prices listed are for base models, and the trim level you see at the dealership may have additional, costlier features. Additional fees, such as delivery costs and market adjustments, can also increase your final price. However, the MSRP does not include potential savings from a federal rebate, which could reduce the price by around 25% for the lowest-priced options.
Below are the EVs with an MSRP of $40,000 or less and a range above 200 miles:
- Chevrolet Bolt EV
- Ford Mustang Mach-E Select
- Hyundai Kona Electric
- Nissan Leaf Plus
- Tesla Model 3 Standard Range Plus (before potential rebates)
Cars under $30,000
2023 Chevrolet Bolt
MSRP: $26,500
Range: 259 miles
2023 Nissan Leaf
MSRP: $28,040
Range: 212 miles
SUVs under $40,000
2023 Hyundai Kona
MSRP: $33,550
Range: 258 miles
Volkswagen ID.4
MSRP: $38,995
Range: 275 miles
2023 Kia Niro
MSRP: $39,550
Range: 253 miles
Summary
- The popularity of electric vehicles (EVs) is growing, and there are now more affordable options available to consumers.
- The average price of new nonluxury cars, including EVs, has spiked to $44,584 as of late 2022, coupled with rising interest rates, resulting in an average monthly car payment exceeding $700.
- Despite this, the EV market has seen many available models in recent years, with EV sales surging from 488,397 in 2021 to 809,739 in 2022.
- The Tesla Model 3 boasts a more extended range than the 2013 Model S and starts at less than $44,000, reflecting the trend in the EV market towards more affordable options.
- Rebates can bring down the cost of new EVs. Certain new EV purchases may be eligible for up to $7,500 in federal tax credits from 2023 to 2032.
- Several EVs are available for under $40,000 with a range above 200 miles, making them suitable for longer trips with fewer charging stops.
- It’s worth noting that the price you pay at a dealership may differ from the MSRP, and not all EVs are eligible for the federal rebate.
- Overall, the average prices of EVs are approaching parity with those of gas-powered cars, and the lowest-priced EVs currently available offer features and specifications that would have been out of reach only a few years ago.
