Electric vehicle (EV) prices have shown significant declines in Europe and the United States, but they remain substantially higher than in China, highlighting a stark global disparity. According to JATO Dynamics’ report, “Closing the Gap: The Progress Towards Affordable EVs and the Rising Competition from China,” Chinese manufacturers have demonstrated unparalleled ability to produce cost-effective battery electric vehicles (BEVs). In contrast, Western markets are grappling with narrowing—but still prominent—price differences between BEVs and internal combustion engine (ICE) vehicles. The report underscores China’s critical role in driving the global transition to EVs and its growing dominance in this sector.
In Europe, the gap between BEV and ICE vehicle prices has narrowed, with the BEV premium dropping from 53% in 2018 to 22% in 2024. This shift is driven by a 15% decrease in BEV prices, coupled with a 7% rise in ICE vehicle costs. Similar trends were observed in the UK and the U.S., where the BEV-ICE price gap declined significantly due to falling BEV prices and, in Europe, rising ICE costs due to regulatory measures and advanced features. However, the reduction in BEV costs has been largely fueled by decreasing battery prices, demonstrating improvements in affordability and efficiency within the EV market. Despite this progress, ICE vehicles remain more accessible to many consumers, and the transition to BEVs remains incomplete.
China, however, outpaces the West in delivering affordable BEVs, maintaining a significant price advantage. The average retail price of a BEV in Europe was over double that of a Chinese BEV in both 2018 and 2024, while similar trends persisted in the U.S. and the UK. China’s competitive pricing, driven by efficient manufacturing and economies of scale, positions it as a global leader in the EV market. As countries pivot away from fossil fuels, the Western automotive industry faces mounting pressure to compete with China’s affordability and innovation. With a growing focus on cost-effective BEVs, China’s dominance is expected to continue shaping the global EV landscape.
