The decline in the BEV-ICE price gap has led to greater uptake of EVs in Europe as models become more accessible and affordable.
But despite this, the high cost of Western BEVs remains a barrier to entry for consumers, while Chinese manufacturers now offer electric cars for as little as €3,250 in China, according to the latest figures from Jato Dynamics in its report “Closing the gap”
It said despite continuous efforts from legacy carmakers to make electric vehicles more affordable, a significant price gap between BEVs and internal combustion engine (ICE) vehicles remains.
Within the Eurozone, the price premium – the additional cost a buyer has to pay for a BEV over an ICE vehicle – has dropped from 53% in 2018 to 22% in 2024.
The average price of a BEV in the region has dropped by 15%, while the average cost of an ICE has risen by 7%.
In the UK the BEV-ICE price gap fell from 51% in 2018 to 18% in 2024. This was caused by declining prices of BEVs (-11%) and rising prices for ICE vehicles (+14%).
Similarly, in the US the BEV-ICE price gap dropped from 53% in 2018 to 15% in 2024.
However, in this case, the price of ICE vehicles did not increase, while the cost of BEVs in US dollars declined by 25%.
“The narrowing of the BEV-ICE price gap cannot only be attributed to the availability of cheaper BEVs on the market.
“Although carmakers’ electric offerings are improving in terms of both quality and affordability, ICE cars have risen in price overall,” said Felipe Munoz, Global Analyst at JATO Dynamics.
“This is a result of factors such as increased regulation, stricter standards and the introduction of more high-tech features, all of which have combined to hike the final retail price of these vehicles. In the meantime, electric cars have benefitted from lower battery costs, which has caused BEV prices to decline,” Munoz continued.
