Electric Cars: Price Gaps Narrowing Globally

A recent study, however, revealed that electric vehicles are now more affordable than ever, with prices dropping by 25% since 2018.

According to a report by industry analysts Jato Dynamics, this price drop has helped narrow the price gap between electric vehicles and traditional fuel-powered cars to its lowest point ever.

In the United States, the price gap was around 50% until 2021. However, with the arrival of many new electric vehicles and Tesla"s aggressive price cuts, the gap shrank to 33% in 2022 and further to just 15% last year.

However, these figures do not necessarily reflect the car-buying experience worldwide.

In some markets, the narrowing gap is due not only to the reduced cost of electric vehicles but also to the significantly higher prices of traditional fuel-powered cars compared to the past.

In Europe, the price gap between electric vehicles and traditional cars was 27% in 2021. It rose to 29% in 2023 before dropping back to 22% last year.

But any perception that American electric vehicle buyers are getting better deals than their European counterparts fades when comparing the situation in China.

For example, the Polestar 4 Dual Motor is sold in the United States for $62,900 (equivalent to €59,452), which seems like a good price compared to €79,424 in the UK and €69,300 in the Eurozone. However, the same car is sold in China for just €52,190 (399,000 yuan).

This highlights that European and American buyers are paying significantly higher prices compared to the Chinese market.