After years of growth, the average price of electric cars in Europe is finally beginning to decline. According to a recent analysis by Transport & Environment, in 2025 the average cost of battery-powered vehicles in the European Union decreased for the first time since 2020, marking a shift in direction compared to recent years.

The drop was around €1,800, equivalent to a 4% reduction, bringing the average price to approximately €42,700. This decrease mainly reflects the arrival on the market of more affordable electric models, as well as the impact of European CO₂ emissions policies, which are pushing manufacturers to expand their offerings into more accessible segments.

Compact cars are driving the price decline

The decrease in prices has been particularly evident in the small car segment, where the average cost of electric vehicles has fallen more sharply than in other categories. It is precisely in this segment that new models are being introduced, designed to make battery-powered mobility accessible to a wider audience.

In recent years, the electric vehicle market had been dominated mainly by larger and more expensive models, often belonging to higher-end categories. This strategy contributed to an increase in the average price of electric vehicles between 2020 and 2024, with an overall rise of about €5,000.

Now, however, the market appears to be changing direction. European emissions regulations, combined with increasing competition among manufacturers, are encouraging the return of more compact models at lower prices.

According to Transport & Environment’s analysis, in some mid-to-large vehicle categories, electric cars have already reached price parity with internal combustion engine vehicles. In the most widespread segments, this balance could be achieved by 2030, especially if cost reductions continue to be reflected in price lists.

The decline in prices, therefore, does not depend solely on technological developments, but also on industrial and environmental policies that are driving the transformation of the European automotive sector.

Innovative technologies for the production and recycling of electric and hybrid vehicles will be presented at E-Tech Europe, which will take place from October 7 to 9, 2026, at BolognaFiere, as part of Urban Tech 2026 – The Urban Technology Show, a new event dedicated to e-mobility, traffic, commuting, security, telecommunications & data, and the environment.

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