Electric vehicle prices drop below hybrid averages

The average global price of electric vehicles (EVs) has fallen to approximately $37,000, making them cheaper than hybrid vehicles, which now average around $39,000. Since 2020, the average price of electric models has decreased by 9 percent, while hybrid prices have risen by 16 percent.

A primary driver of this shift is the declining cost of lithium-ion batteries, which saw a 37 percent price drop between 2020 and 2025. Batteries typically account for 30 to 40 percent of an electric vehicle's total cost. The industry is also seeing increased use of more affordable LFP batteries that do not contain cobalt.

China plays a dominant role in this market, controlling roughly 80 percent of the global battery market. Chinese manufacturers have significantly expanded their export capabilities, growing from fewer than 100,000 electric vehicle exports in 2020 to 1.64 million last year. This expansion is particularly notable in Southeast Asia and South America, where Chinese brands are rapidly increasing their market presence.