EV prices increased for the first time in 2026, and the reasons can be attributed to the discounts.

      In July, the average price of electric vehicles sold in the US reached $56,126, marking a 1.6% increase compared to the previous year and the first rise of 2026, as reported by Kelley Blue Book. Automakers reduced EV incentives by 24.3% year-over-year after discontinuing models and decreasing supply.

      In July, the average electric vehicle in the United States sold for $56,126, which is 1.6% higher than a year ago and 1.2% more than in June. This is the first price increase in 2026 following a continuous decline since December, according to Kelley Blue Book.

      Despite the increase in the average price, dealer discounts for EVs fell to $6,626 in July, a drop of 24.3% from the same month last year, leading buyers to pay closer to the manufacturer's suggested retail price.

      Electric vehicles are still receiving larger discounts compared to other vehicles on the market. Incentives for EVs account for 11.8% of the transaction price, while the broader industry average is 6.4%, and Tesla's incentives stand at 10.4%.

      Manufacturers can afford to reduce discounts due to their earlier cutbacks in supply. This year, a dozen electric vehicle models have been removed from the market as tariffs, the loss of tax credits, and increased import costs have changed the landscape.

      “Automakers have less excess inventory of EVs," said Sam Abuelsamid, vice president of market research at Telemetry, in an interview with Business Insider. “They don’t need to spend as much on incentives, nor do they need to negotiate prices as aggressively, giving them greater pricing power.”

      Overall, the automotive market is on an upward trend. The average price of a new vehicle was $49,855 in July, reflecting a 1.9% increase year-on-year and the highest price of 2026.

      One point of consideration regarding the EV average is that luxury buyers are more likely to purchase electric vehicles, according to K.C. Boyce from the research firm Escalent, which skews the average upward regardless of price fluctuations.

      Less expensive vehicles are set to enter the market that could potentially lower the average. Slate’s stripped-down pickup, with a starting price of $24,950, is set to begin deliveries later this year.

      Ford’s Fathom pickup has a base price of $28,350 before destination fees, totaling $29,945 on the road. Escalent discovered that buyers typically consider an affordable new car to fall within the $32,000 to $48,000 range, placing both models below this threshold.

      The firm’s most valuable insight reveals that offering a home charger and its installation with a new EV significantly impacts affordability perceptions, equating to an approximate $8,000 reduction in perceived price.