Electric cars have become significantly cheaper

Electric cars have become substantially more affordable for consumers in recent years, with real-world prices dropping by nearly 20 percent over the last five years. This trend marks a significant shift, making EVs increasingly competitive with traditional combustion engine vehicles.

While average purchase prices might appear higher due to the introduction of larger, better-equipped, and longer-range models, a closer examination reveals a different story. A study analyzing over 100,000 vehicle configurations found that while internal combustion engine car prices rose nominally by about 24 percent, electric car prices remained virtually unchanged. After accounting for inflation, EVs actually became about 18 percent cheaper, while combustion engine cars became roughly 2 percent more expensive.

This price improvement is largely driven by falling battery costs, which decreased globally by 21 to 24 percent between 2020 and 2025. Manufacturers have translated these savings into more compelling offerings for consumers. As a result, buyers are now getting significantly more capable vehicles for their money.

The average range of electric cars has also seen considerable improvement across various segments. In the lower-middle class, range increased by about a quarter, and in the upper-middle class, it grew by over 30 percent. Models offering over 700 kilometers of range are no longer a rarity. This enhanced performance, combined with stable or decreasing real prices, means consumers are paying approximately 15 percent less per kilometer of electric range than five years ago, signaling a true "market maturation."