The cost gap between electric and gas-powered vehicles is closing rapidly, with JATO Dynamics reporting the price premium for EVs has dropped from 53% to 22% across Europe since 2018.
In the UK market, the difference has shrunk even more dramatically, falling from 51% to 18% over the same period.
The shift comes from both declining EV prices and rising costs for traditional vehicles. EV prices in the Eurozone dropped 15% while conventional vehicle prices increased 7%. UK markets saw an 11% decrease in EV prices alongside a 14% rise in gas-powered vehicle costs.
“The narrowing of the BEV-ICE price gap cannot only be attributed to the availability of cheaper BEVs on the market,” said JATO Dynamics analyst Felipe Munoz. “Although carmakers’ electric offerings are improving in terms of both quality and affordability, ICE cars have risen in price overall.”
Munoz points to increased regulations, stricter standards, and new technology requirements driving up traditional vehicle prices, while falling battery costs help reduce EV prices.
European manufacturers are introducing more affordable electric models, including the Renault 5 and Vauxhall Frontera, starting around €25,000. However, JATO’s analysis shows Western markets still lag significantly behind China in EV affordability.
The average EV in the Eurozone costs more than double its Chinese counterpart, where some electric vehicles sell for as little as €3,250.
This price disparity has slightly improved in the Eurozone, dropping from 118% to 111%. However, the UK gap has widened from 100% to 122% between 2018 and 2024. The US market saw its differential decrease from 125% to 109%.
“China is already one of the major players in the automotive space, and this is not something that is going to change any time soon,” Munoz said. “A Chinese BEV is likely to be more appealing to consumers than a comparable model from a Western automaker, simply due to the enormous price difference.”
The data suggests Chinese manufacturers are outpacing Western competitors in developing affordable EVs, positioning them to attract customers both domestically and internationally.
