EV prices are rising again as automakers pull back on discounts

• The average transaction price for EVs was $56,126 in July, according to Kelley Blue Book.
• That’s a 1.6% increase compared to July 2025. It’s the first EV price rise of 2026, KBB said.
• There are two main reasons: fewer EVs on dealership lots and higher gas prices.

For the first time in 2026, EV prices are rising.

In July, the average transaction price for a new fully electric vehicle jumped to $56,126, per Kelley Blue Book. That’s a 1.6% increase compared to the same month in 2025, and a 1.2% rise compared to June.

The increase breaks a monthslong trend. EV prices had been falling since December.

After the $7,500 federal tax credit for US-made clean vehicles expired in late 2025, automakers leaned more heavily on their own incentives to prop up EV sales amid declining demand. Those manufacturer discounts helped put downward pressure on EV transaction prices through the first half of the year.

Sam Abuelsamid, the vice president of market research at Telemetry, told Business Insider that July’s pricing U-turn stems from two factors: tighter EV supply as car companies discontinue products and renewed interest in electric cars as gas prices remain high.

“Automakers have less excess inventory of EVs,” he said. “They don’t have to spend as much on incentives, and they don’t have to negotiate on price as much. It gives car companies more pricing power.”

K.C. Boyce, the vice president of automotive and energy research at Escalent, said luxury buyers are disproportionately likely to buy EVs, which can distort the average transaction price.

“Buyers in the luxury segment are most likely to purchase an EV versus those on the mainstream side,” he said.

Now, EVs are joining the industry-wide trend: New-car prices have been rising since March, with the average transaction price for a new vehicle reaching $49,855 in July, per KBB’s report. That’s the highest average so far in 2026.

New EVs coming — with very different pricing

Abuelsamid said EV prices could continue inching up over the next few months.

Until cheaper competitors hit the stage.

“There’s definitely interest in bringing lower-cost models into the market,” he said. “Once they’re here, we’ll probably start to see that average price on electric vehicles start to trend downwards.”

There are a few main vehicles that could start that downward pressure. Slate’s bare-bones pickup truck — with a starting price of $24,950 — is expected to begin deliveries later this year. Last week, Ford announced that the first vehicle built on its coming EV platform, the Fathom pickup, will carry a $28,350 starting price. Toyota and Subaru also released a line of new EVs starting in the high $30,000 range.

Escalent’s research found that consumers broadly define an affordable new vehicle as priced between $32,000 and $48,000, Boyce said.

“This data really explains why we are seeing consumers say, ‘New vehicles in general, and EVs in particular, feel unaffordable to me,'” he said.

Price cuts aren’t the only way automakers can make EVs feel more affordable, he added. Escalent found that including a home charger and installation with a new EV had the same effect on consumers’ perception of affordability as cutting the vehicle’s MSRP by $8,000.

“That is a huge difference,” Boyce said.