China has halved EV prices in a decade but they’re still rising in Britain, Europe and the US.
JATO Dynamics shares its latest report on the evolution of the electric vehicle (EV) markets in China, the US and Europe. ‘EVs – A pricing challenge’’ includes JATO’s industry-leading data and insights, exploring EV pricing over the past 10 years, alongside the impact of government incentives on the growth across these markets.
While governments and policy makers have undoubtedly become increasingly influenced by environmental issues and the green agenda in recent years, analysis in the report finds that not enough is being done to produce affordable EVs across several markets.
While the pricing of EVs in China – the world’s largest market for EVs – has significantly fallen by almost half (47%) since 2011, US and European markets have seen EV prices rise over the same time period, by 38% and 28% respectively.
China’s success in producing affordable EVs comes down to a number of factors, including its government’s decision to invest heavily in the domestic market from as early as 2009.
Today, consumers in China can buy a brand new EV for as little as €3,700. In stark contrast, the average retail price for an EV in the US continues to rise faster than any other major global market and now stands at €36,200, up from €26,200 in 2011.
Former diesel drivers could be spearheading tomorrow’s switch to electric vehicles says online car supermarket BuyaCar.co.uk.
Analysts at BuyaCar have identified a consistent trend during 2021 which sees EVs appearing to eat into the share of diesel searches.
Tracking hundreds of thousands of searches in which site visitors actively specify a fuel type, they detect an apparent drift from diesel in particular toward EVs, while interest in petrol cars is unchanged.
Average retail prices today are highest in Europe. In May 2021, EVs were on average 52% more expensive than ICE cars in the UK, and 54% more expensive in the Netherlands. In Germany, the average retail price of an EV is €39,755 compared to €36,979 for ICE vehicles. Norway is the only exception – the average retail price for EVs is €44,500 compared to €53,000 for ICE cars.
To date, government-led incentives have been a vital factor supporting the automotive industry to offset the price gap between traditional cars and EVs. China’s commitment to the development of affordable EVs has strengthened the market to such an extent that its government is now in the process of phasing out incentives, while OEMs in Europe and the US continue to rely on such schemes to boost their sales.
In the US, tax credits have accelerated the growth of the premium EV market, failing to help lower income buyers purchase EVs with OEMs yet to develop a truly affordable EV offering.
Prioritising environmental action in recent years, European governments have developed a range of incentivisation schemes including tax exemptions and purchase grants with varying success across the continent.
For both the US and Europe, it remains to be seen if rolling back these incentives will stimulate manufacturers to take action or see them fall behind competitors in China.