Price study: E-cars in Germany 18 percent cheaper in real terms since 2020

Despite the real price decline, the average list price of a new electric car rose nominally from around 37,000 euros to about 53,000 euros. According to Plötz, this is mainly due to a shift in the product range: "The average price has risen because quite different vehicles are now on offer. Otherwise one would be comparing apples with pears. To prevent that, we tried to look at the same or comparable vehicles over time."

Why the average price is still rising

In the same period, a comparable combustion vehicle became about 2 percent more expensive in real terms and around 24 percent more expensive nominally. The real price gap between E-cars and combustion engines thus widened significantly – at the same time as the technology improved. According to the study, the average range of the E-cars examined grew by around 30 percent.

Model diversity also changed dramatically: the number of BEV models available in Germany grew from 38 in 2020 to 159 last year (2025). The number of combustion engine models fell over the same period from 275 to 194. According to the study's authors, around 73 percent of all available E-car models fall into the mid-size and upper mid-size segments; in these segments, the number rose from 16 to 116 models.

Growing choice with a gap in microcars

Kyle Morrison of the ICCT pointed to the growing selection: "In the mid-size and upper mid-size segments, consumers now have roughly as many electric vehicles to choose from as vehicles with combustion engines." By contrast, microcars and small cars remain a weak point: in these segments, only 19 E-cars are available compared with 35 combustion vehicles. Microcars and minis together account for just 14 percent of the BEV offering.

The researchers see a key reason for falling prices in the globally declining cost of batteries. These fell nominally by 21 to 24 percent and in real terms by 35 to 37 percent. Foreign manufacturers, especially Chinese ones, were able to use LFP batteries at just over 50 US dollars per kilowatt-hour as early as 2024. BloombergNEF forecasts battery prices of around 58 US dollars per kilowatt-hour by 2030.

Battery prices as a price driver

However, as Plötz emphasizes, this cost advantage has not yet fully reached consumers: "The significantly lower battery costs have not yet been fully reflected in lower list prices. This means: the potential for further price reductions in electric vehicles is far from exhausted." Peter Mock of the ICCT also sees further room for improvement: "The lower battery prices have not yet been fully passed on. In addition, rising production volumes and pressure on manufacturers from CO2 limits should also help."

Germany's former environmental bonus, which at times subsidized E-cars with up to 6,000 euros, has since expired. According to the ICCT, current subsidies target lower-income households but are not specifically aimed at affordable vehicles or low list prices. The study's authors therefore recommend higher subsidies for small BEVs or a price cap for subsidized vehicles.

The price decline is particularly evident on the used car market: compact and mid-size used BEVs are already available for 20,000 to 40,000 euros, with smaller models available for 10,000 to 15,000 euros. The study expects that by the end of 2026, around 700,000 to 900,000 lease returns from the boom years of 2021 to 2023 will come onto the market, further increasing supply.

Outlook: Price parity by 2030?

In new registrations, E-cars most recently accounted for more than a quarter of new registrations in both Germany and Austria. The ICCT expects a BEV share of around 28 percent of new registrations in 2025 – supported by stricter EU CO2 fleet targets. The platform Auto Scout 24 recorded a 40 percent increase in search interest for E-cars in June compared with the start of the year, while searches for diesel and petrol cars fell by 20 and 15 percent respectively.

The study's authors forecast that price parity between E-cars and combustion engines in the new car market could be reached between 2025 and 2030 even without subsidies. Plötz: "In terms of total cost per kilometer, they would then be clearly cheaper." Experience from other markets has shown that E-cars could achieve a market share of around 50 percent at price parity. The authors call for stable regulatory conditions and advise manufacturers to pass on falling battery prices to list prices rather than investing them in range optimization.

The researchers note as a limitation that the study compares list rather than transaction prices, as transaction prices are not available in sufficient breadth. According to the authors, however, this decision is unlikely to have caused any major distortions.