Tesla Model 3 (Source: Tesla)
New EV prices continued to slide in May, even as sales climbed to their strongest level since the Trump administration killed federal EV tax credits last fall.
According to new Kelley Blue Book data, the average transaction price (ATP) for a new electric vehicle fell to $54,532 in May. That’s down 4% from a year ago and marks the 11th straight month of year-over-year declines in EV prices.
At the same time, EV demand appears to be holding up. Early estimates suggest more than 85,000 EVs were sold in May, making it the strongest month for EV sales since federal tax credits were eliminated at the end of the third quarter of 2025.
Incentives also remained a major factor in keeping EV prices competitive. In May, automakers spent an average of 14% of a vehicle’s transaction price on incentives, or about $7,600 per vehicle. That’s nearly double the industry average and essentially unchanged from April.
Tesla, which still makes up roughly half of all EV sales in the US, continued to put downward pressure on average EV prices.
The average price paid for a Tesla in May fell 1% from April and was down 3.4% compared with a year earlier. Nearly all of Tesla’s sales – 96% – came from its two most affordable models: the Model 3, with an average transaction price of $49,082, and the Model Y, at $51,537.
Because Tesla represents such a large share of the EV market, changes in Tesla pricing have an outsized effect on EV prices overall.
While EV incentives remain unusually high, May’s sales numbers suggest buyers are still showing up even after the loss of federal tax credits, helped in part by continued price cuts and aggressive discounts from automakers. Rising gas prices are also driving the spike in EV sales.
Read more: EV prices drop again as the gap with gas cars hits a record low
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