Squeezing Price Gap: Electric Vehicles Beat Traditional Cars at a Record Low
Dropped Gap Between Electric and Gasoline Vehicles' Costs Reaches Historic Low
Get ready for a revolution in the automotive world! The price difference between electric cars and combustion engines has never been smaller, according to recent reports in May, and it's set to drop even further. Analyzing the top 20 best-selling models, automotive expert Ferdinand Dudenhoeffer from the Center Automotive Research (CAR) in Bochum states that the average electric vehicle (EV) now costs only 3,655 euros more than its combustion engine counterpart. That's a decrease of 13.5% compared to April!
Here's the catch: the shrinking price gap is primarily due to "significantly higher" discounts on new electric vehicles, with an average 17.4% discount in May - the most significant EV discount ever recorded.
Interestingly, the transaction price for an average electric vehicle was 36,519 euros in May, thought to be influenced by replacing the Tesla Model 3 (a major player in driving the electrification) with more contemporary models from popular brands like Kia, Volvo, Toyota, and Ford.
So, although the price gap between electric vehicles and combustion engines reached a record low in May, it's worth noting that this trend is continuing and has actually been more prominent in recent years (such as April 2025). With the average EV transaction price around $59,255 and the price gap with traditional vehicles at $11,087, more consumers can now afford to go electric[2][3].
The Magnet Pulling Consumers to Electric Vehicles
The narrowing price gap between electric and combustion engine cars can be attributed to several significant factors:
- Production Efficiencies: As major automakers broaden their EV production, especially in North America and China, economies of scale help drive down unit costs.
- Battery Advances: The price of lithium-ion batteries - the most expensive EV component - has plummeted significantly in recent years, making EVs more affordable.
- Government Support: While some incentives have declined, government tax credits and manufacturer incentives still remain substantial, helping offset the purchase price.
- Market Pressure: Automakers are racing to expand their EV offerings and increase market share, leading to discounting and price reductions, especially among leading brands.
- Used EV Appeal: The used EV market is experiencing increased demand, with prices gap between used EVs and gasoline cars at historic lows, making them an attractive choice for budget-conscious buyers.
Beyond these factors, broader trends in the auto industry, such as stricter fuel economy standards, growing consumer interest in sustainability, and dynamic market dynamics, are favoring the shift towards electric vehicles[2].
Looking Forward
With an ever-reliable focus on EV affordability and continued market competition, electric vehicles are becoming increasingly accessible to a broader range of consumers[2][3]. The emphasis on used EVs further underscores this accessibility shift, with thousands of popular models selling under $25,000, making them a serious contender in the used car market. Keep an eye on this market, as it continues to evolve, earning electric vehicles the position as the cars of the future!
[References][1] ntv.de, AFP[2] InsideEVs, accessed April 2025,[3] EIA, accessed April 2025,[4] US DoE, accessed February 2025.
The community is increasingly taking notice of the affordability of electric vehicles, as the price gap between them and traditional cars continues to shrink due to factors such as production efficiencies, battery advances, government support, market pressure, and the appeal of the used EV market. As the lifestyle trends towards sustainability and technology becomes more integrated into our daily lives, electric vehicles are poised to become the norm, from vocational training programs preparing workers for electric vehicle production, to consumers purchasing electric vehicles as an everyday mode of transportation.
