Reduced costs in electric cars versus traditional internal combustion engines

Reduced price disparity between electric and cheaper fossil fuel vehicles, signifying a shift in the automotive market.

, and Administrator

2025 September 17 . 11:27 PM

2 min read

Reducing vehicle costs: A decline in electric car prices versus traditional engines

Reduced costs in electric cars versus traditional internal combustion engines

In a significant shift for the automotive industry, electric vehicles (EVs) are becoming more affordable, with the average price of a best-selling 2021 EV in Europe now standing at 35,353 euros, according to a study by CAR. This represents a decrease in average EV prices since the beginning of the year.

The study suggests that German automakers are playing a significant role in making EVs more attractive to customers. Notably, German giants like Volkswagen are actively working to reduce the price advantage of conventional cars over EVs. The VW ID.4, priced around €35,000, undercuts some competitors like Kia's EV6 priced at €45,990.

Advances in electric motor technology by German startups, such as DeepDrive, also contribute to improving cost and efficiency, further driving down EV prices.

The shrinking price gap between EVs and conventional cars indicates a trend towards affordability for EVs. In August, the price gap was 2,243 euros, a significant decrease from the same period last year. Within a year, this gap has decreased by more than two-thirds.

CAR experts predict that electric cars will surpass the 20 percent threshold of new registrations next year, a testament to their growing popularity. Interestingly, state environmental subsidies or sales bonuses for EVs are no longer necessary, according to the experts.

Meanwhile, the price of conventional cars has slightly increased, with an average price of 33,110 euros, according to CAR. The price of EVs, as shown by the CAR analysis, is becoming more competitive with conventional cars.

The average discount for pure electric cars is 17.5 percent, another factor contributing to their affordability.

As the EV market becomes more competitive, other players are also making their moves. Chinese automakers, who will showcase their aim to conquer the European market at the upcoming IAA motor show in Munich, play a minor role on the German automotive market. However, a larger number of both domestic and imported electric car models will contribute to the predicted increase in electric car registrations.

The notion that German automakers have missed the boat on electric mobility is long outdated. On the contrary, they are leading the charge towards a more affordable and sustainable future for EVs.