New vehicle prices were mostly flat overall year-over-year as increases and cuts balanced each other out.
Kelley Blue Book noted that the average transaction price for a new vehicle in August was up only $42 compared to the same time last year to $48,451.
The group credited higher inventory levels and increased incentives holding year-over-year price gains in check.
Luxury vehicle prices dropped 3.3 per cent thanks to big cuts made by Tesla. The EV automaker dropped prices upwards of 20 per cent from $65,688 to $53,376 on average.
Incentives for EVs in August made up 8.1 per cent of average transaction prices.
“After a tumultuous last few years in the automotive marketplace, now we are seeing new-vehicle pricing trends hold steady,” said Rebecca Rydzewski, research manager at Cox Automotive. “Dealers and automakers are feeling price pressure, and with high auto loan rates and growing inventory levels, new-vehicle prices seem to have hit a ceiling, at least for now.”
The Q3 2023 Cox Automotive Dealers Sentiment Index, franchised automobile dealers have declining expectations for EV sales in the coming months.
“Dealers are realizing this is not going to be an easy road in the short term, especially for some brands. However, the pressure dealers feel is from over-supply rather than a lack of demand. I see this as a natural speed bump and an expected part of growth,” said Cox Automotive chief economist Jonathan Smoke. “The No. 1 issue for consumers is price, and that’s a barrier even to considering an electric vehicle. As an economist, I can confidently predict that surplus inventory and increased competition will eventually drive down prices, which will help with EV consideration and adoption.”