The EV Price Gap Is Finally ShrinkingTheTruthAboutCars.comTTAC News StaffMon, September 14, 2026 at 10:40 PM UTCAdd us on Googlethe ev price gap is finally shrinkingBuying a new car in America keeps getting more expensive. The exception, oddly enough, is the segment that spent years being written off as too pricey to bother with.the ev price gap is finally shrinkingKelley Blue Book's August pricing report puts the average new vehicle at $50,089, up 1.9% year over year. EVs moved the other direction, averaging $54,813 - down 2.7% annually and 1.2% from July.Yes, electric cars are still more expensive than the average new vehicle. But the premium is now $4,724, and it's shrinking. For a category long dismissed on sticker alone, a narrowing gap while everything else climbs is worth noticing.AdvertisementAdvertisementHere's the part that complicates the "EVs are only cheap because of discounts" argument. EV prices dropped even as manufacturers pulled back on incentives. According to Kelley Blue Book, cash rebates and subsidized lease and financing deals averaged 12% of EV transaction prices in August, down from 14.6% a year earlier.the ev price gap is finally shrinkingBased on August's average prices, that still works out to roughly $6,600 per electric vehicle - about double the incentive level across the broader new-car market. So the support is thinning, but it hasn't disappeared. Big deals remain, including Lucid offering $10,000 off 2026 Gravity SUVs from inventory plus 0% financing.Tesla did much of the heavy lifting. Its average transaction price fell to $52,616 in August, down 3.4% from 2025. Because Tesla still commands such a large share of total U.S. EV sales, where its prices go, the electric-car average tends to follow.Combustion shoppers aren't so lucky. Kelley Blue Book reports prices rose across the five biggest segments, with compact cars up 2.9% and subcompact SUVs up 2.2% - precisely the affordable end where buyers can least absorb it. Midsize SUVs also became the most popular segment, bumping compact SUVs to second and dragging the average upward.the ev price gap is finally shrinkingThe upshot: for the first time in a while, it may actually be worth pulling EV and combustion offers side by side instead of assuming the electric one is out of reach.[Images: Tesla, Ford, Lucid, Hyundai]Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by subscribing to our newsletter.
