Many automakers are offering discounts to lure buyers to buy battery-powered vehicles. It is against the backdrop of sluggish growth. Buyers who want bargain prices on vehicles may consider adding an EV. In the latest news from BNN Network, automakers like Hyundai Motor and Ford Motor are offering discounts on some models. The cash discounts on certain models are as high as $7,500.

Automakers offer leasing options

Other automakers are offering leasing deals to customers with lower monthly payments. To make premium EVs affordable for people on a budget, some auto companies have come up with lower interest rate promotions.

Ford slashes the price of the Mustang Mach-E SUV

Tesla, a leader in EVs, has reduced the prices of some models by almost a third. It also lowered the prices of other vehicles in its lineup. Following the market leader, Ford has also reduced the price of the Mustang Mach-E SUV twice in 2023.

Promotional offers are an advantage to car buyers. The recent price cuts narrow the price difference between a traditional gasoline vehicle and an EV. Also, the demand for EVs, which were in great demand, is waning. According to a statement from dealers and car executives, price cuts and discounts are required because many car buyers are unwilling to pay higher prices for EVs.

Car makers usually offer discounts to sell models that are not moving or to increase their market share. It affects the resale value of already-purchased vehicles. However, it also hurts the profits of automakers. The auto industry was not offering discounts during the pandemic because they had few vehicles in their inventory.

Restrictions on subsidies reduce demand for EVs

According to the latest USA News, EV makers are seeing lower demand for battery-powered vehicles because of the recent restrictions on the central tax of $7,500 for electric vehicle buyers and the sluggish demand for this technology. Other challenges, like the requirement of a place for car owners to plug in to charge the vehicle, are also denting the demand for EVs.

The new rules implemented in April have reduced the number of EV models qualifying for subsidies. So, the automakers are offering a cash discount to vehicle buyers to offset the loss of the $7,500 tax credit. Other automakers are also under pressure to offer discounts because Tesla has offered steep discounts on its models.

In an earnings call, the Chief Financial Officer of Ford, John Lawler, said the company has seen a sharper reduction in car prices than expected. The company offers a cash rebate of $7,500, which is apart from the tax credits offered for F-150 Lightning pickup trucks. Volkswagen requires no down payment and came up with a lease deal for its ID.4 electric SUV.

According to information posted on a car shopping website, customers are receiving a discount of $2,000 for electric vehicles in September. The customers had paid a premium of $1,500 for EVs a year ago.

The loss-making startups are facing trouble from a wave of discounts offered by large automakers. In August, Lucid Group, a luxury EV maker, reduced the price of its vehicles amid weakening demand by up to $13,000. Other startups are also following suit with planned price reductions for their vehicles.