Electric vehicle prices now match or beat gas cars

The growth of the US electric vehicle market began to slow in 2023 after several years of robust improvement. From 2021 to 2023, the retail EV market share more than doubled from 3.6% to 8.5%. But since then, this metric has been mired in the 7-9.5% range. Through the first four months of 2025, the EV market share of 8.6% is up only .3 percentage points from a year ago, and in April alone, it declined year-over-year one percentage point to 7.6%.

However, a key breakthrough is emerging: the long-standing premium on electric vehicle prices compared to gasoline vehicles is vanishing, potentially reshaping the trajectory of electric car sales.

Several factors help explain the EV market slowdown, including a limited and sometimes unreliable charging infrastructure, range anxiety, negative media coverage, narrow EV product portfolios and high prices.  

However, S&P Global Mobility’s new vehicle registration data, combined with TransUnion financial data, suggests that the widely reported price gap between EVs and gasoline vehicles no longer exists. Segment- and model-level data shows that EVs now often have average monthly payments equal to or even below their gasoline counterparts, potentially signaling a shift to more affordable electric vehicles. 

The chart below shows average monthly lease payments for EVs and same-segment gasoline vehicles across the three highest EV volume compact segments from Q1 2024 to April 2025. In the compact luxury car and compact luxury utility segments, EV monthly payments consistently trended below those of gasoline vehicles. In the compact utility segment, EV and gasoline vehicle payments were similar until April 2025, when EV payments fell below gas cars. 

Data for three midsize segments show similar trends. In the lower midsize utility segment, EV payments were higher than gasoline payments in early 2024 but have since declined to match or fall below them. In the lower midsize luxury utility segment, EV payments have trailed gasoline payments since Q2 2024, and in the upper midsize luxury utility segment, EV payments were near gasoline payments through Q3 2024 but recently have risen above them—making it the only one of the six segments studied in which EV payments now significantly exceed gasoline payments. 

Model-level data from S&P Global Mobility and TransUnion reinforce the conclusion that the EV price premium is disappearing. As shown below, monthly payments for seven of 10 ongoing high-volume EV models declined from January–April 2024 to January–April 2025. For six of the seven models showing declines, these declines were in double digits, underscoring the evolving landscape of electric vehicle pricing. 

As EV payments have declined, the EV buyer profile has also evolved, based on average credit score. As shown below, from Q1 2019 to Q1 2025, EV buyers’ average credit score dropped from 786 to 767, while the average for non-EV buyers rose from 735 to 750. 

The robust incentive programs offered by manufacturers are a significant factor behind the decline in EV monthly payments. In May, Autodata reported that incentive spending per unit reached more than $24,000 for models such as the Audi E-Tron GT and Mercedes-Benz EQS SUV, and more than $21,000 for the BMW IX.

These substantial incentives, combined with pre-incentive losses, raise concerns about the long-term sustainability of these pricing strategies. Only a limited number of OEMs are likely able to maintain such losses over extended periods. Also, the discontinuation of the $7,500 tax credit for EVs, part of the federal administration’s recently passed budget bill, further jeopardizes the competitiveness of EV prices.

Despite incentives, EV demand remains sluggish, partly due to barriers previously described, such as insufficient charging infrastructure, range anxiety, limited EV product variety and the continued appeal of hybrid vehicles.

But the US EV market is evolving rapidly. From April 2024 to April 2025, the number of electric vehicle models with notable sales increased from 57 to 76, representing the addition of 19 models in one year—or roughly 1.5 new EVs entering the market each month. This rapid pace of change highlights the competitive nature of the electric vehicle industry, especially as hybrid models further diversify the landscape.