# EU electric vehicle market and industrial policy > Live situation record from CLSTR: https://clstr.news/situations/eu-electric-vehicle-market-and-industrial-policy > Updated: 2026-09-22T09:12:51.000Z. Sources: 10. Developments: 2. In 2025, electric vehicles (EVs) in the European Union were approximately 33 percent cheaper to operate than comparable gasoline cars, according to the International Council on Clean Transportation. This advantage was driven by a 35 percent global decrease in battery costs between 2020 and 2025 and rising energy costs for internal combustion engines. In Germany, starting prices for battery electric vehicles reached parity with gasoline models in 2025. However, new European Union industrial policies, such as the ‘Made in Europe’ automotive package and the Industrial Accelerator Act, may impact these economic trends. These measures aim to strengthen domestic manufacturing and reduce dependence on foreign competitors like China through local-content requirements for batteries, steel, and vehicles, alongside potential tariffs on Chinese imports. Research from the think tank Bruegel suggests these protectionist measures could increase vehicle costs, acting as an implicit pact that shields manufacturers while placing a financial burden on consumers and taxpayers. Specifically, requiring battery cell production within the EU could raise costs from €50 to €85 per kilowatt-hour, potentially adding over €2,100 to the price of a standard EV. Low-carbon steel requirements could add another €200 per vehicle. Industry responses remain divided. BMW board member Milan Nedeljkovic has advocated for voluntary pricing agreements with China rather than increased tariffs to avoid escalating trade tensions. Meanwhile, the EU automotive sector continues to struggle with declining domestic production and the challenge of balancing global supply chain efficiency against localized resilience. ## Claims - Requiring battery cells to be produced within the EU could increase costs from €50 to €85 per kilowatt-hour. (corroborated by 4 sources) - Local battery production requirements could add approximately €2,100 to the price of a typical electric vehicle. (corroborated by 4 sources) - Low-carbon steel requirements could increase electric vehicle prices by an additional €200. (corroborated by 3 sources) - The EU's current policy acts as an implicit pact to protect manufacturers in exchange for localized supply chains. (corroborated by 3 sources) - EU automotive policies aim to balance global supply chain efficiency with domestic resilience, but costs are often obscured. (corroborated by 2 sources) - BMW board member Milan Nedeljkovic supports voluntary pricing agreements with China over further tariffs to manage competition. (single source) - The Industrial Accelerator Act proposes local-content and low-carbon requirements for public procurement and subsidies. (single source) - Regulatory unpredictability acts as a cost to competitiveness for the European automotive industry. (single source) ## Timeline ### 2026-09-22: European Union automotive policies risk raising electric vehicle prices EU industrial policies aimed at protecting the automotive sector through local-content requirements could increase electric vehicle prices by over €2,100, according to a report by Bruegel. 7 sources. https://clstr.news/cluster/eu-automotive-protection-rules-could-raise-ev-prices-by-2100 ### 2026-09-11: Electric vehicles in EU 33% cheaper to operate than gasoline cars A report by the ICCT finds that EVs in the EU were 33% cheaper to operate than gasoline cars in 2025, driven by falling battery costs and rising fuel prices for internal combustion engines. 3 sources. https://clstr.news/cluster/electric-vehicle-operating-costs-in-eu-33-lower-than-gasoline --- Cite as: EU electric vehicle market and industrial policy. CLSTR, https://clstr.news/situations/eu-electric-vehicle-market-and-industrial-policy