- Battery costs fell about 35 percent in real terms since 2020.
- Equivalent electric models dropped roughly 18 percent over five years.
- Combustion cars moved the other way, growing about 2 percent.
Every year we’re told the next breakthrough in battery technology will finally make EVs more affordable. Quietly, that’s already started happening… at least on the manufacturing side. According to a new study out of Germany, global battery costs have fallen by roughly 35 percent in real terms since 2020. Yet if you’ve been shopping for an EV lately, you’ve probably noticed they haven’t become dramatically cheaper. In fact, the median advertised price actually went up. Here’s why.
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Researchers from the International Council on Clean Transportation (ICCT) analyzed more than 100,000 passenger car configurations sold in Germany between 2020 and 2025. When comparing equivalent models and adjusting for inflation, vehicle weight, power output, battery capacity, and electric range, they found battery electric vehicle prices fell by about 18 percent in real terms over the five-year period. Yes, prices fell by almost one-fifth. At the same time, internal combustion vehicles became roughly 2 percent more expensive.
The study attributes much of that price drop to falling battery costs. What’s particularly interesting is the gap between the roughly 35 percent decline in battery prices and the 18 percent reduction in vehicle prices. Researchers say manufacturers appear to have used some of those savings to increase driving range, improve vehicle specifications, or offset research and development costs instead of cutting sticker prices even further.
Why The Median Price Climbed
On top of that, the overall market tells us an even more interesting story. The study confirms that individual EV models became cheaper while the median advertised price across the entire German market actually went up, growing from around €38,000 ($44,000) in 2020 to €54,000 ($62,000) in 2025.
That’s largely because the number of available EV models exploded from 38 to 159 during the study period, with much of that growth coming from larger, more expensive vehicles in the lower-medium, medium and upper-medium segments. Buyers shopping for smaller, more affordable EVs still have relatively few choices, with mini and small cars accounting for just 14 percent of all BEV models on sale.
It’s worth noting that the findings reflect the German market rather than the United States, where incentives, taxes and consumer preferences differ considerably. Even so, the report highlights an important reality for anyone expecting dramatically cheaper EVs. Falling battery costs don’t automatically translate into lower sticker prices. Sometimes they become longer range, more equipment, or simply more expensive vehicles.
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