Electric vehicle skeptics criticize EVs for being expensive. It’s true. But it’s not entirely true. EVs have not yet achieved cost parity with combustion cars. However, Americans spend more than they think on vehicles; the average new car purchase is more than $48,000. And even setting the cutoff at $40,000, several decent electric car options are available.
Buying an EV for less than $40,000 can be tricky. Many manufacturers offer an underpowered base model with a smaller battery pack to keep the nominal starting MSRP under $40,000. An EV under $40,000 is likely to be RWD or FWD. All-wheel drive typically requires at least a dual-motor system, which drives the price beyond $40,000.
Note that starting MSRP may not be the most critical factor. Several EVs are potentially eligible for the full $7,500 federal tax credit, which can lower the starting price. All EV leases are eligible for a $7,500 federal tax credit, which dealers can pair with additional incentives to reduce the monthly payment required dramatically.
What are the best EVs to buy under $40,000? Here are our favorite options.
Gallery: 2024 Chevrolet Equinox EV: First Drive, May 2024 Detroit
Best Overall: Chevrolet Equinox EV
- Starting MSRP: $33,600
- EPA Range: 285-319 miles
- Federal Tax Credit: $7,500
The Chevrolet Equinox EV isn’t the sportiest or sexiest EV on the market. But it offers an impressive EPA range for its price point. The base LT FWD model delivers 319 miles of range with a starting MSRP of $33,600. The Equinox EV is eligible for the full $7,500 federal tax credit to drive the starting price even further, allowing an AWD upgrade while staying under the $40,000 limit.
Gallery: 2024 Hyundai Kona Electric Review (Limited)
Best Affordable: Hyundai Kona EV
- Starting MSRP: $32,875
- EPA Range: 201-261 miles
- Federal Tax Credit: NA
Hyundai offers an electric version of its Kona crossover, the Kona EV, which slots beneath the Ioniq 5 and Ioniq 6. The Kona EV is not eligible for the federal tax credit. And it only offers 150 kW fast charging instead of the Hyundai E-GMP platform’s 350 kW fast charging. But it is reasonably stylish and cheap. And you can level up to the SEL trim with 201 horsepower and 261 miles of range for $36,875.
Best Long Range: Tesla Model 3
- Starting MSRP: $42,490
- EPA Range: 303-363 miles
- Federal Tax Credit: $7,500
Tesla discontinued the base Model 3, with a $38,990 MSRP. Part of the reason was the $42,490 Long Range Rear-Wheel Drive trim being eligible for the full $7,500 federal tax credit and effectively cheaper. That trim delivers a 363-mile EPA range far more expensive EVs fail to match. You can technically get a Stealth Grey AWD model with the federal tax credit and stay under $40,000 MSRP. However, delivery charges will push the price above $40,000.
Gallery: 2024 Volkswagen ID.4 Pro S Review
Best for Families: Volkswagen ID.4
- Starting MSRP: $39,735
- EPA Range: 206-291 miles
- Federal Tax Credit: $7,500
VW eschewed its heritage and quirkiness to begin its modern EV push with the ID.4, an electric take on the Tiguan compact crossover. There are reasons why a lot of families buy Tiguans. The ID.4 provides ample cargo space for an EV, 30.3 cubic feet behind the rear seats and a potential 64.2 cubic feet total. And full federal tax credit eligibility means you can upgrade to the Pro RWD model with 282 horsepower and 291 miles of EPA range and stay under $40,000. The ID.4 is also an IIHS Top Safety Pick.
Gallery: 2024 Fiat 500e First Drive
Best Small EV City Car: Fiat 500e
- Starting MSRP: $32,500
- EPA Range: 141 miles
- Federal Tax Credit: NA
City cars are a niche segment for the American market; most Americans will want something with more range. The American version of the Volvo EX30 is delayed. So, the Fiat 500e gets the nod over the Mini Cooper SE. It has more potential range, 141 with all-season tires to 117 miles. It has faster charging, 85kW vs. 50kW. And it’s about 40 inches shorter than a Hyundai Ioniq 5, which should allow it to fit into the tightest parking spots.
