Industry officials and analysts cautioned that the U.S. EV market is still in a formative phase, with many consumers still evaluating whether EVs fit their needs and major automakers still ramping up production.

“There’s a natural speed of market growth here that many are fighting against, and there’s a lot of confusion in the market with too many brands,” said Vitaly Golomb, an investment banker who focuses on EVs. “The strong will survive here and the rest will struggle.”

Tesla is using its lead in EV production costs to accelerate demand with price cuts. Legacy automakers are losing money on most of their electric models.

Tesla, Rivian and other new EV companies do not have dealers or report inventory. Tesla last week reported better-than-expected global deliveries. But the Texas-based EV company has been offering a variety of discounts and incentive offers to spur demand, such as discounts tied to customer referrals launched late last week.

Tesla’s price cuts, and competitors’ responses, pushed average selling prices for EVs for the second quarter to $53,438, Cox said. That is down 19.5 percent from the peak of $66,390 in June 2022.

Automakers face tough competitive choices, as well as regulatory pressure from Washington, as they try to accelerate EV sales to levels that will support new North American EV production capacity, such as Ford’s sprawling Blue Oval City complex in Tennessee.

The Biden administration has proposed emissions rules that effectively require U.S. automakers to shift their sales to two-thirds EVs by 2032 – a proposal GM and the association representing most automakers in the United States have said is unrealistic.

“Price cuts do show that we’re in sort of an equilibrium of demand and supply and price so when sales aren’t there, they’re going to be dropping price,” said Mark Wakefield, co-head of consultancy AlixPartners’ automotive practice. “Tesla in particular has the room to do that.”

Wakefield said it is too soon to declare that U.S. EV demand has hit a plateau. “We see it as choppy growth, but continued growth,” he said.