Dealerships are Adding a $10,000 Markup to Already Expensive EV Models

By: Ben C | Last updated: Feb 14, 2024

President Biden, as well as other state government officials, have been asking Americans to choose electric vehicles for their next car in order to combat the ever-growing climate change problem. 

However, while there are even mandates in some states that automobile brands need to start making and selling more electric vehicles than gas-guzzling models, these cars are still not as accessible as they should be. 

Lots of Problems with Electric Vehicles

Realistically, there are quite a few problems within the electric vehicle industry. But while many people complain about the lack of charging stations, the real issue is the price point. 

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AutoNation signs displayed at Chevrolet car dealership in California

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At this stage, there is a wide variety of price points for gas-powered cars to suit any budget, but almost all-electric vehicles (EVs) on the market today are considered quite expensive. 

Tesla Has Been Trying to Cut Prices

As one of the first and most prominent EV manufacturers, Tesla has long been aware that if its cars aren’t affordable, it won’t sell as many of them. 

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A sign marks the location of a Tesla dealership in Illinois

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Therefore, the company, run by billionaire Elon Musk, has been trying desperately to slash prices as much as possible. 

Other Brands Not Taking the Same Tactic

Interestingly, several other car companies that have segued into the electric vehicle market are not following the proven Tesla model. 

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Tesla logo on the steering wheel of electric vehicle

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In fact, many of these brands are actually putting what people consider higher than necessary price tags on their EVs.

GM EVs Among the Most Expensive

Within the General Motors family, there are several new electric models, such as the Chevrolet Blazer EV, the Ford F-150 Lighting, and the Chevrolet Equinox EV. 

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General Motors logo at Chevrolet dealership in California

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However, the company’s rollout of these new all-electric vehicles has not been nearly as successful as they originally hoped, and many consumers say it’s because of their pricing. 

Tesla vs. Chevy

A great example of this is that the Tesla Model Y, which compares directly to the Chevy Blazer EV, is only $38,990 brand new. On the other hand, the Blazer EV starts almost $20,000 higher, at $56,715. 

All-electric Chevrolet Blazer EV in showroom in LA

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However, it’s important to understand that these are just the starting prices recommended by the manufacturers. And while most Tesla dealerships offer their EVs at the suggested price point, it seems that GM dealerships are not following suit. 

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Dealerships Adding Nearly $10,000 to the MSRP

A recent study conducted by CarsDirect found that not only are EVs generally pretty expensive but also that many dealerships around the country are seriously increasing the prices of their EVs. 

All-electric Chevrolet Silverado EV on display at the Los Angeles Auto Show

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In fact, the average markup on electric vehicles like the Chevy Blazer EV is a whopping $10,000. 

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Some Dealerships Taking it to an Extreme

And some dealerships are adding a whole lot more. For example, the study noted that, on average, dealerships were adding about $50,000 to GMC Hummer EVs. 

GMC Hummer EV at Chicago Auto Show

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And that’s on top of the standard price tag, which is already more than Tesla’s equivalent or, of course, a gas-powered option. 

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Are Dealerships Allowed to Increase Prices So Significantly?

Realistically, increasing the price point at dealerships is allowed and common practice. However, it’s usually not this extreme. 

An electric BMW vehicle charging

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GM has taken action in response to dealerships adding tens of thousands of dollars to their vehicles, asking them to stop doing so. 

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GM Incentivizes Prospective Buyers

These increased prices have played a huge part in GM’s disappointing EV sales over the last couple of years. So, in order to combat this problem, GM has had to make some real adjustments to its tactics. 

Ford F-150 Lighting electric pickup truck with “Lighting” written on the side

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For example, it’s now offering buyers up to $7,500 credit if they buy one a Ford F-150 Lightning all-electric pickup. 

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Other Companies Follow Suit

While GM’s EV department has certainly been struggling, it is not alone. In fact, the popular South Korean company Hyundai Motors has also had to make some changes to its price points to stay in the game. 

Hyundai Motor Co. Blue-Will electric hybrid vehicle

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Hyundai decreased its lease prices by almost half of its IONIA 5 and 6 models to provide a price point much more similar to Tesla. 

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Dealers Will Need to Drop Prices if They Want to Sell EVs

The truth is that while many people are considering EVs in order to help save the planet, if dealerships cannot lower their prices even a little, it’s unlikely that many Americans will be able to afford one. 

A row of electric vehicles is plugged in and charging at public electric vehicle charging stations in California

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And brands like Chevy, Ford, and Hyundai will continue to struggle to sell EVs if they can’t ensure their prices are as low as Tesla’s. 

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