Fraunhofer study: EV list prices fell 18% inflation-adjusted since 2020, combustion cars up 2%

Study design and data

Researchers from the Fraunhofer Institute for Systems and Innovation Research (ISI) and the International Council on Clean Transportation (ICCT) evaluated more than 100,000 individual records from an ADAC database. To ensure a fair comparison, they did not simply average all electric and all combustion vehicles. Instead, they matched comparable models across time periods. Patrick Plötz, a professor at Fraunhofer ISI, explained that the average price of EVs had risen because the market expanded into more expensive segments, but that would be comparing apples to oranges. The study therefore focused on like-for-like vehicle comparisons. The analysis used list prices rather than transaction prices, as comprehensive transaction data is not available. However, the authors noted that discount trends for electric cars have been rising, which would likely make the real-world cost advantage even larger.

The average price has risen, but these are completely different vehicles. You would be comparing apples to oranges. To prevent that, we tried to look at the same or comparable vehicles over time.

How prices moved

Inflation-adjusted list prices for battery electric vehicles fell by 18 percent between 2020 and 2025. Over the same period, combustion engine vehicle prices increased by 2 percent in real terms. The study adjusted for consumer price inflation, which was particularly high in 2022 and 2023, making the real price decline for EVs even more striking. Peter Mock of ICCT said the results show the EV market has developed considerably, with vehicles now offering greater range and more power while real prices for comparable models have declined.

Our results show that the electric car market has developed significantly in recent years. The vehicles now offer on average greater ranges and more engine power, while the real prices of comparable models have fallen.

What comes next

Patrick Plötz pointed to several factors that could further reduce EV prices. Battery costs have fallen but those reductions have not yet been fully reflected in vehicle prices. Rising production volumes and regulatory pressure from CO2 emission limits should also help. If current trends continue, electric cars could reach price parity with comparable combustion models in Europe by around 2030. At that point, total cost per kilometer would clearly favor EVs. Plötz noted that experience from other markets shows that when prices are equal, electric vehicles can capture roughly 50 percent market share.

The fallen battery prices have not yet been fully passed on. In addition, rising unit numbers and pressure on manufacturers from CO2 limits should help.

Discounts and real-world costs

Ferdinand Dudenhöffer, a well-known automotive industry expert, provided data on discount levels for electric cars. His analysis indicates an upward trend in discounts on important EV models in recent years. If transaction prices were used instead of list prices, the cost advantage for electric vehicles would likely be even more pronounced. The study's authors acknowledged this limitation but argued that the overall direction of the findings is robust.

Market context

The findings arrive as European automakers navigate tightening CO2 regulations and increasing competition from Chinese electric vehicle manufacturers. The real price decline for EVs could accelerate consumer adoption, especially if battery costs continue to fall. The study suggests the electric vehicle market is maturing, with vehicles offering better value than just a few years ago. The projected price parity by 2030 would mark a turning point for the industry.