Tesla Inc.’s (NASDAQ:TSLA) aggressive price reductions throughout 2023 played a pivotal role in narrowing the gap between electric vehicles (EVs) and traditional internal combustion engine (ICE) vehicles, bringing the market closer to achieving price parity.
What Happened: According to Cox Automotive, the Elon Musk-led company’s strategic maneuvers triggered a price war in the auto industry. Consequently, competitors faced significant pressure, leading to a widespread decrease in EV prices throughout 2023.
By December, the average Tesla vehicle price had fallen to $50,051, closely approaching the average ICE vehicle price of $48,759. The broader auto industry followed suit, with the average EV price dropping to $50,798. This reflected a similar decline from the average EV price of $52,362 in November.