Why The Cost Of Owning An EV Has Jumped Dramatically

Tue 24th Aug 2021

Government schemes to make electric vehicles more affordable may be artificially inflating the price of EVs according to a new report which focuses on the cost of emission-free cars over the last decade.

Analysis from Jato Dynamics reveals that the cost of buying an EV in Europe has jumped from an average price of €33,292 in 2012 to €42,568 in 2021, but at the same time electric car prices have fallen from €41,800 to €22,100, a huge drop of 47 per cent. And if European drivers feel stung by rapid increases, spare a thought for our friends across the Atlantic, where the average cost of an EV has grown by 38 per cent.

The clear distinction in the price comparisons between China and the rest of the world is that EVs in the far east are aimed at the budget urban city segment, whereas in many cases in the Western world an EV is seen as a premium product and often requires government subsidies to make it affordable.

“Governments and manufacturers have made significant progress over the last decade in expanding the EV market. However, the industry remains under pressure as it continues to adapt to the requirements of sustainability targets and shifting market forces,” said Jato Dynamics CEO David Krajicek.

“The incentivisation of EVs has supported western manufacturers seeking to expand their offering as consumer demand has evolved. However, the industry’s key players must start to address the price gap between EVs and ICE cars if they're to remain competitive with their peers in China.”

The same research found that EVs are 52 per cent more expensive than ICE cars in the UK, with Norway being the only country in Europe where an EV is cheaper than the average car.