Electric Car Prices Drop in EU for First Time in 5 Years: What’s Driving the Change?
The average cost of electric vehicles in the European Union has fallen for the first time in the last five years. This is stated in an analysis by the environmental organization Transport & Environment.
What is known
According to the study, in 2025, the average price of an electric vehicle in the EU decreased by approximately €1,800 (–4%) to €42,700. The main reason was the emergence of more affordable B-class models. In this class, the average cost of battery electric vehicles decreased by 13%.
Examples of affordable models include the Citroën ë‑C3 and Renault 5 E‑Tech, which automakers have introduced to meet the initial EU targets for reducing CO₂ emissions for car fleets by 2025. These requirements were later eased: they are now considered as a three-year average for the period 2025–2027.
According to Sebastian Bock, head of the German division of Transport & Environment, CO₂ emission standards have a positive impact on both the climate and consumers' wallets. He believes that if the goals for 2030 are maintained, new electric vehicles could soon become cheaper than internal combustion engine vehicles.
The reduction in the average price in 2025 contrasts with previous years. From 2020 to 2024, the average cost of electric vehicles increased by approximately €5,000. This happened because automakers focused on larger and more profitable models.
Among such vehicles are: Audi Q4 e‑tron, Audi e‑tron GT, Volkswagen ID.4, Volkswagen ID.5, Volkswagen ID.7, BMW iX, BMW i4, BMW i7, Mercedes‑Benz EQE, Mercedes‑Benz EQS, and Porsche Taycan.
Automakers are now preparing new, more affordable models. In particular, Volkswagen ID. Polo and Cupra Raval, as well as compact crossovers Volkswagen ID. Cross and Skoda Epiq. The starting price for the Volkswagen ID. Polo is expected to be around €25,000, while other models will be slightly more expensive.
Transport & Environment estimates that by 2024, electric vehicles in segments D and E will have reached price parity with ICE vehicles. For segments A, B, and C, this could happen by 2030, if manufacturers continue to reduce costs and pass on these savings to consumers.
However, this process may slow down if the EU relaxes CO₂ emission requirements for 2030. Analysts estimate that in this case, the average price of an electric vehicle in the EU could be approximately €2,300 higher than if current goals are maintained.
Moreover, this could affect the spread of electric vehicles. If the CO₂ emission target for 2030 averages over three years, the share of electric vehicles among new registrations may decrease from 57% to 47%. If the average is stretched over five years, the share could drop to 32%.
Transport & Environment experts believe that easing requirements will lead automakers to focus again on more expensive models, instead of mass-market compact electric vehicles. At the same time, analysts note that Chinese automakers continue to actively strengthen their positions in the European market.
Source: Electrive
