Why electric cars are getting cheaper — three reasons

Electric vehicles, which just a few years ago were considered a luxury and expensive mode of transport, are rapidly approaching price parity with internal combustion engine cars. Models priced at $15–17 thousand are already appearing on the market, while premium brands like Mercedes are beginning to offer electric cars at the same price as their hybrid counterparts.

What is driving the prices of "green" transport down — reports This is Money.

Falling battery costs

The cost of batteries has always been the main barrier to making electric cars affordable. However, research shows that over the past year alone, the price of lithium-ion batteries has dropped by 20%, with the average cost now at $115 per kWh. It is expected to fall to $69 per kWh by 2030. Mass production in China, the use of cheaper materials, and new technologies, including LFP batteries, have made electric vehicles significantly more accessible.

Pressure from Chinese manufacturers

Chinese brands, including BYD, MG, and Chery, are actively entering European markets with more affordable models. In 2023, 60% of electric vehicles in China were already cheaper than their gasoline counterparts. This is forcing European automakers to lower prices and offer more accessible options as well. For example, Volkswagen introduced the compact ID.1 for $17,000, while Dacia is preparing a city electric car priced at $15,000.

Sharp increase in supply

While there were only eight electric cars models on the UK market in 2015, today there are over 130. The more manufacturers enter the segment, the stronger the competition and the lower the prices. Buyers benefit from a wider selection, while companies are forced to compete for customers.

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