Inflation is testing the limits of vehicle affordability for automotive buyers. Findings from Escalent’s EVForward®, the largest study of electric vehicle (EV) buyers and electrified powertrain adoption, show that, since 2022, consumers have steadily increased their anticipated vehicle spend each year, demonstrating a willingness to adjust their budgets as costs rise.
However, almost two-thirds (61%) now say they think vehicle prices are at an all-time high. That pressure is bringing buyers’ perceptions of affordability into conflict with current pricing.
Escalent’s 2026 Affordability DeepDive study surveyed over 1,000 EVForward respondents to understand how consumers define “affordable” and what this means for the EV market. When asked what they would consider a reasonable price for a new vehicle, respondents placed the range between $31,865 and $47,838. By comparison, the average new vehicle price is $49,461, according to Kelley Blue Book. The disparity is even wider for EVs, which post an average transaction price of $55,211. In the past, the $7,500 federal tax credit would have helped to offset the difference between buyers’ budget and EV pricing. Now, with the incentive rolled back, many consumers feel effectively shut out of the segment.
How Buyers Evaluate EV Affordability
When assessing vehicle affordability, buyers look at both upfront and ongoing costs. The factors consumers cited most frequently were purchase price (68%), monthly payment (67%) and total cost of ownership (54%). EV Intenders (those identified by Escalent’s algorithms as buyers who are more than 15 times more likely to purchase an EV) over-indexed on all these measures. In addition, 87% of EV Intenders agreed operating costs were as important as sticker price, suggesting they take a more holistic view of vehicle affordability than the average buyer.
Meanwhile, 75% of EV Intenders said manageable monthly payments could make an expensive vehicle more affordable. The same share would accept a larger upfront payment in exchange for lower costs over time. For this group of buyers, a higher purchase price might be feasible if it came with a sustainable payment plan or the prospect of future savings on fuel and maintenance.
However, while EVs offer savings in running costs, they also introduce powertrain-specific expenses. If OEMs want to emphasize the long-term cost advantages of EV ownership, they will need to account for how factors such as home charging installation impact buyer perceptions of affordability.
Lowering the Barriers to EV Ownership
With EVs out of reach for many buyers, automakers need to find new ways to make ownership attainable. One possible lever is the used market. According to our research, 55% of buyers would definitely, probably or maybe consider a used EV. Anxiety around battery longevity, however, is a significant hurdle. When asked about their biggest concerns with buying a used EV, 71% of respondents cited unknown battery health. Providing credible information on battery condition, including how much useful life remains, could help buyers feel more comfortable.
Automakers may also be able to reduce prices by allowing buyers to “option up” on features. This strategy would require careful execution, though, as our study found that buyers draw a firm line on certain vehicle attributes. For example, 79% of respondents identified at least 250 miles of range as a “must have” in an EV. But beyond the core priorities of range, reliability and quality, buyers appear open to tradeoffs. Nearly half (47%) said they would accept fewer features if it kept the vehicle at $30,000. That could make a modular pricing strategy, with a lower base price and room to customize, an appealing approach.
Alternative incentives provide another potential route. Our findings revealed that some OEM-backed incentives could be just as impactful as the now-repealed federal tax credit. The caveat is that automakers will need to be sure which incentives will resonate with buyers before they go to market. Otherwise, they risk investing in offers that miss the mark.
Finding Flexibility in the Affordability Equation
The affordability equation is getting harder to balance for today’s buyers. However, the good news for automakers is that the shoppers they most need to court—EV Intenders—show considerable latitude in how they judge whether a vehicle fits their budget. OEMs can tap into that flexibility by giving buyers more ways to make EV ownership pencil out. Certified pre-owned vehicles (CPOs) can reduce barriers to entry. Modular pricing structures can give shoppers greater control over their upfront costs. And alternative incentives can make the initial purchase more manageable.
The key to leveraging any of these strategies effectively is a deep understanding of consumer motivations and preferences. Automakers need to know which factors influence whether a vehicle feels affordable, where shoppers may be open to compromise and what concerns could hold them back. The closer pricing and incentives align with those priorities, the better positioned automakers will be to bring new buyers into the EV market.
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