Average Price Of EVs Has Fallen 25% Since 2018
Price gap between EVs and combustion cars dropped from 50 percent to 15 percent in three years
January 25, 2025 at 14:21
- EV prices have dropped by 25 percent since 2018, making them more affordable than ever.
- The average price gap between combustion and EV cars in the US is now just 15 percent.
- Despite EV price drops, buyers in Europe and the UK are paying significantly more than China.
For years, alongside valid concerns about driving range, charging speeds, and infrastructure, buyers who choose not to go electric have often cited the high price of EVs as a major factor. But a new study shows that electric vehicles are more affordable than ever, with inflation-adjusted prices dropping by a solid 25 percent since 2018.
In fact, according to a report by industry analysts Jato Dynamics, the drop in EV prices has brought the gap between electric and combustion cars to its narrowest point yet. The difference stood at around 50 percent in the US until 2021, then the arrival of a glut of new EVs and aggressive price cuts by Tesla narrowed it to 33 percent in 2022. Last year it was just 15 percent.
Related: EV Prices Could Match Gas Cars By 2026, If Governments Don’t Ruin It
Those US figures are not necessarily representative of the car buying experience across the world. In some markets the closing of the gap isn’t only down to EVs costing less than they used to, but because combustion cars cost so much more in real terms than they previously did. In Europe the price gap between EVs and combustion vehicles was 27 percent in 2021 and actually climbed to 29 percent in 2023 before dropping back to 22 percent last year.
But any notions that American EV buyers are getting a great deal and their Euro cousins are getting stiffed disappears when you factor in the situation in China. Compared to Chinese drivers, European and American EV buyers are both being shafted.
Powertrain Price Changes 2018 to 2024 (Inflation Adjusted)
Take the Polestar 4 Dual Motor, which cost $62,900 in the US, or the equivalent of €59,452 at the time Jato complied its report. True, that looks good value next to the €79,424 British drivers are charged and the €69,300 being asked in the Eurozone. But the same EV costs just €52,190 (¥399,000) in China.
More: VW ID.7 Launches In China At Nearly Half The Price It Costs In Germany
Other comparisons between the four regions are made more difficult because the US doesn’t take many of the same cars. But a look at the table below shows UK drivers are paying in some cases more than twice as much as their Chinese counterparts for the exact same car built in the same factory.
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