For the first time in years, the average price of an electric vehicle in the EU is heading downward — and it could spell trouble for the petrol car.
Electric vehicles have long struggled with a problem manufacturers were reluctant to address openly: they simply weren’t affordable enough for most ordinary buyers. Prices kept climbing even as battery costs and production technology moved in the opposite direction. But the market now appears to have reached a turning point.
A new analysis from Transport & Environment shows that the average EV price in the EU fell in 2025 — the first time the curve has pointed downward since 2020. Prices dropped by an average of €1,800, or around four percent, bringing the average electric car to €42,700.
The biggest drop was in the B-segment — the smaller cars that represent the most realistic option for many European buyers. In that category, average prices fell by 13 percent over the course of 2025.
New, affordable models are driving the shift
The explanation is fairly straightforward: more EVs are now being built with mass-market pricing in mind. Models like the Citroën ë-C3 and the Renault 5 E-Tech are highlighted in the analysis as key examples of cars that have helped push the market in a new direction.
For years, the segment was dominated by larger, more expensive vehicles where manufacturers could extract higher margins per unit sold. Between 2020 and 2024, the average EV price in the EU rose by around €5,000 — even as production costs were falling. In short, the savings weren’t being passed on to consumers.
According to Transport & Environment, it is the EU’s tightened CO₂ emissions targets that have pushed manufacturers to take affordable EVs more seriously.
“EU emissions targets are delivering cheaper electric cars to European consumers. The industry won’t like to admit it, but the timing of last year’s affordable new models is telling. If we don’t weaken the 2030 target, a new electric car will soon cost less than a petrol car.”
— Lucien Mathieu, Vehicle Policy, Transport & Environment
The report also notes that manufacturers representing around half of the EU market are already meeting emissions requirements for 2025–2027 — two years ahead of schedule. Renault and Volkswagen are cited as producers still behind, but both are expected to meet the targets before 2027.
Approaching price parity with petrol cars
One of the most striking findings in the analysis is that EVs in the larger D- and E-segments already reached price parity with equivalent combustion-engine vehicles in 2024. In the smaller A, B, and C segments, the gap has not yet been fully closed — but the expectation is that EVs could reach the same price level by 2030, provided manufacturers continue passing falling costs on to customers.
Despite the positive trajectory, the shift is far from guaranteed. Transport & Environment warns that cheaper EVs could be delayed if the EU chooses to loosen its climate targets. The European Commission has proposed that the 2030 target be calculated as a three-year average — a technical-sounding change that T&E estimates could make EVs an average of €2,300 more expensive than they would otherwise be.
