SACRAMENTO, Calif. — Yossi Levi is the founder and CEO of Car Dealership Guy Media. He was a car dealer for 13 years and now uses his platform to share information about the auto industry, providing context to those insights.
Levi explains why price cuts are happening across the electric vehicle industry.
He says new and used EV inventory is up 136% year-over-year, and that supply and demand is a main factor. He says significant discounts are happening because cars aren't selling.
Levi says Tesla, which commands a majority of the market share, was the first to start price cuts. He says they're at the other end of it and are still able to turn a profit.
More recently, Levi says other manufacturers are cutting prices on EV models. He gives an example, like the Ford Mach-E and Lightning pickup truck or Hyundai's Ioniq.
He says now is a perfect storm for a cooling EV market. Levi referenced the record-low interest rates and supply shortages that gave auto manufacturers pricing power back in 2021, but says things are different.
"First it's supply, you simply have a lot more EVs in the market. Second, it's overall market conditions. Every car, all manufacturers are down. All supply is more or less up across the board, and so the market is naturally cooling. Even if it weren't for supply growing, for EVs, the market has cooled, there's no doubt about that. Then the third thing, is again, in 2022 there is another tailwind which was gas prices they were shooting up much higher, that has sort of retracted," said Levi.
He says we could see some more pain for auto manufacturers, but this allows consumers to get good deals.
He doesn't see manufacturers raising prices again. He says if they do, it won't be as aggressive as the drops happening now.
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