Chinese EVs Now Almost As Affordable As Gasoline Cars

Newly released data from the International Energy Agency shows how advanced the Chinese electric vehicle market has become in an international comparison. Next to the limits of charging infrastructure and range, the higher price of electric vehicles has been a major hurdle for buyers all over the world. In China, however, there are now almost just as many affordable electric car models as there are traditional gasoline cars on offer.

The analysis shows that in 2024, 45% of internal combustion engine car models in China cost under $25,000. For electric cars, this was the case for 39% of models. High end models were actually more common among traditional cars in China, with 21% prices at more than $50,000, compared to 15% of EV models. In the mid-ranges, electric cars still ran a little bit more pricey in the country.

Chinese EVs have started to successfully disrupt international, specifically European, markets and due to their lower price points, this is not a surprise. In Europe and the United States, electric car models on offer in 2024 were on average still much more expensive than combustion cars. Only 3 percent of models in Europe and none in the U.S. were priced below $25,000 last year. Only 6% and 3%, respectively, cost up to $30,000 in the two markets—an overwhelming difference to Chinese models.

The report by the IEA also shows that production by Chinese car makers had started up in Europe, making up around 8% of European Union EV production last year. The picture in the U.S. is drastically different, as no Chinese companies have set up shop in the country and individual importing is almost impossible due to U.S. law. President Joe Biden in 2024 also introduced a tariff of 100% on the import of electric vehicles, targeting the Chinese market.

Can The European Market Adapt?

An outlook of announced models until 2026 potentially shows some cheaper EVs coming up for Europe, but no discernable change in the United States. The change in Europe could be in connection to Chinese price pressure, but it seems that adjustments would be too little to late in light of the drastically different price policy for Chinese EVs.

The IEA’s outlook on EV affordability is mostly positive, with the report highlighting the advantages of “falling battery prices, intensifying market competition and carmakers reaching economies of scale”. The authors note that while Chinese car makers were able to pass the factor of falling battery price on to consumers, American and European producers did so to a lesser degree or failed to do so completely. The intense competition in the Chinese small car market was responsible for advantageous consumer price outcomes, according to the report, with 95% of Chinese small car sales already electric in 2024. But even in the SUV segment, which is the most popular car category in China, EV models reached price parity with combustion cars last year, again showcasing the radically different reality for Chinese EV buyers.

Charted by Statista