EV prices have fallen sharply since 2020 after adjusting for inflation, narrowing the cost gap with internal‑combustion vehicles
Executive summary: Fraunhofer‑Institut and ICCT published an analysis showing inflation‑adjusted EV prices have dropped markedly since 2020, approaching cost parity with internal‑combustion engines. Lower EV prices reduce the need for purchase subsidies, accelerate consumer adoption, and affect automakers’ product‑mix and capital‑allocation decisions.
Who is involved: Fraunhofer Institute for Systems and Innovation Research, International Council on Clean Transportation (ICCT), German automotive manufacturers, and policymakers evaluating EV incentives.
Likely next: Continued cost declines will likely spur further EV model launches, prompt reviews of national incentive schemes, and increase pressure on battery suppliers to expand capacity.
A study by the Fraunhofer Institute and the ICCT shows that, when inflation is stripped out, electric vehicles have become considerably cheaper than they were in 2020, bringing them closer to price parity with gasoline‑powered cars. The researchers note that the trend is expected to continue as battery costs fall and production scales. This shift could influence automakers’ pricing plans and the future shape of government incentive programmes.
Timeline
- — Studie: Elektroautos seit 2020 deutlich billiger geworden (Handelsblatt)
- — Elektromobilität: Studie: Elektroautos seit 2020 deutlich billiger geworden (Handelsblatt)
Analysis — what this means
Sectors affected
- Electric vehicle manufacturers
- Battery supply chain
- Automotive retail
Sources
- Studie: Elektroautos seit 2020 deutlich billiger geworden — Handelsblatt
- Elektromobilität: Studie: Elektroautos seit 2020 deutlich billiger geworden — Handelsblatt