Germany’s EV market changed sharply between 2020 and 2025. Battery electric vehicles became cheaper in real terms, while the market expanded far beyond the early model lineup. The new ICCT and Fraunhofer ISI study shows that the main story is not simple price inflation. It is a structural shift in what buyers can choose, what automakers offer, and how battery costs are feeding into vehicle design.
The headline result is clear. Comparable BEV models fell by about 18 percent in real terms over the period. At the same time, the number of available electric models grew from 38 to 159.
Average prices mislead
Average list prices rose from about €37,000 to €53,000. That sounds like EVs became more expensive, but the average hides a major mix effect. Germany’s EV market moved toward larger vehicles, stronger powertrains, and longer ranges. Those changes pushed the list-price average upward even while comparable models became cheaper.
This distinction matters for readers, buyers, and policymakers. A market average reflects the product mix, not just the underlying cost of similar vehicles. When the lineup changes quickly, the average can obscure real affordability gains.
Comparable models became cheaper
The study tracked individual models over time and controlled for weight, power, range, battery capacity, and inflation. Under that method, BEV prices fell by roughly 18 percent in real terms. ICEV prices moved in the opposite direction and rose by about 2 percent in real terms.
That result is important because it captures what consumers often compare when shopping. It shows that a similar electric car became cheaper to buy over the period, even if the overall showroom average rose. The research therefore separates market appearance from model-level economics.
Battery costs and vehicle upgrades
Battery prices fell sharply during the same period. The study says global battery prices dropped by 21 percent to 24 percent in nominal terms, and by about 35 percent to 37 percent in real terms. That means battery costs moved down much faster than many sticker prices.
Yet those savings did not fully reach buyers as lower list prices. Instead, part of the benefit went into bigger packs, better range, and stronger performance. Average electric range increased by about one-third, which suggests manufacturers used cost gains to improve product quality and not only to cut prices.
Model choice expanded fast
Model availability is one of the biggest changes in the German EV market. BEV offerings rose from 38 models in 2020 to 159 in 2025. Over the same period, ICEV model availability fell from 275 to 194.
The gap has narrowed most in the mid-size and upper-mid-size classes. In those segments, consumers now have roughly as many electric options as combustion-engine options. The smaller car classes still lag behind, especially the mini and small segments.
Segment gaps remain
The smallest segments still matter for affordability. In 2025, the study found 19 electric models in the mini and small classes, compared with 35 ICEV models. That imbalance matters because smaller vehicles usually serve buyers with tighter budgets.
This is where the affordability debate becomes more practical. If EV adoption is to broaden, the market must deliver more compact, lower-cost electric cars. Larger EVs help drive visibility and scale, but small-car coverage remains the clearest market gap.
What the findings imply
The study points to a market that is advancing, but not evenly. Germany now has more choice, lower comparable BEV prices, and better range than five years ago. It also still has a shortage of affordable small EVs.
The authors argue that stable long-term CO2 fleet rules can help support further investment. They also suggest that policy certainty can accelerate cost parity with combustion cars and support battery manufacturing. The message is that price reductions are possible, but market structure and regulation will decide how fast they reach consumers.
Key findings
- Comparable BEV prices fell about 18 percent in real terms.
- Average BEV list prices rose because the model mix shifted upward.
- BEV model choice rose from 38 to 159 models.
- ICEV model availability fell from 275 to 194 models.
- Battery prices dropped by about 35 percent to 37 percent in real terms.
- Average electric range increased by about one-third.
- The mini and small segments still show the largest EV gap.
Sources: ICCT
