German Study: Electric Cars Are 18% Cheaper Over 5 Years Despite Better Performance

A recent German study has revealed that electric cars have become significantly more price-competitive over the past five years, recording a notable drop in their real prices, while internal combustion engine vehicles continued to see price increases. The study, conducted by the Fraunhofer Institute for Systems and Innovation Research in collaboration with the International Council on Clean Transportation, found that the real prices of electric cars, adjusted for inflation, declined by 18% between 2020 and 2025.

Electric Vehicles Outperform Traditional Models

In contrast, the prices of internal combustion engine vehicles rose by approximately 2% during the same period, strengthening the cost advantage of electric vehicles per kilometer. Peter Mock, a researcher at the International Council on Clean Transportation, stated that the results confirm electric cars now offer longer driving ranges and better motor performance, despite their actual prices being lower than comparable models launched years ago. This shift enhances the appeal of electric vehicles as a more economical and sustainable alternative.

Study Methodology and Data Analysis

Researchers based the study on analyzing more than 100,000 vehicle records from the German Automobile Club (ADAC) database. The study authors emphasized they avoided a direct average-price comparison between all electric and all combustion-engine cars, because the electric vehicle market has expanded significantly in recent years, with the entry of luxury and high-priced models. Patrick Plötz, a professor at the Fraunhofer Institute, explained that relying solely on average prices would have led to an unfair comparison between vehicles from different segments. Instead, the researchers focused on comparing the same or similar models over time to achieve more accurate results.

According to the study, nominal prices for electric cars remained largely stable, while combustion-engine vehicles experienced continuous price hikes. When factoring in inflation, which surged notably in recent years, the real decline in electric car prices became apparent, contrasting with the rising cost of traditional vehicles. These findings confirm that electric cars have become a more economically viable option for consumers, especially with improved performance and extended driving range.

This study comes at a time when the global automotive market is gradually shifting toward electrification, amid increasing regulatory and governmental pressures to reduce emissions. Electric cars are establishing themselves not only as an environmentally friendly choice but also as a more competitive economic option, boosting expectations for sales growth in the coming years.