The electric car market is going through a phase where technological lines are moving less than economic ones. Since the beginning of 2025, the battle is being fought over list prices, manufacturers’ margins, and the ability of European supply chains to withstand Asian competition that structures its costs differently.
Recent data shows that the price gap between electric and thermal vehicles is narrowing across several segments. This movement alters purchasing decisions as much as industrial strategies.
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Price gap between electric and thermal: the shift in segments B and C
A C-Ways study reported by TF1 Info establishes that in 2025, the average price of new cars has dropped for the first time since 2019. The significant fact directly concerns the balance of power between powertrains.
In segment B, the price gap has decreased from around 10,000 euros in 2024 to 5,200 euros in 2025. The drop is sharp and reflects the simultaneous arrival of several models priced below 25,000 euros, such as the Citroën ë-C3 or the Renault 5 electric.
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In segment C, the gap falls to around 2,900 euros. By applying the minimum ecological bonus of 3,700 euros for a vehicle produced in the European Union, the electric model effectively becomes cheaper than its thermal equivalent. This reversal changes the very nature of the purchasing decision: the acquisition cost, long cited as the primary barrier by buyers, disappears in these categories.
This shift does not result from a single cause. European regulatory pressure on average fleet emissions pushes manufacturers to lower the prices of their electric vehicles to sell more. At the same time, the decrease in battery cell costs, driven by overcapacity in production in China, allows for compression of manufacturing costs.
Finding business information on EV Mag helps track these price movements over the months.
CO2 standards and penalties 2026: the regulatory constraint reshaping the offer
The tightening of European CO2 emission standards for 2025 imposes a lower average fleet for manufacturers. Each excess gram is costly in fines, which explains why several brands are adjusting their pricing structures to steer sales towards electric vehicles.
In France, the strengthening of the ecological penalty planned for 2026 adds another layer of pressure. According to the site Heure de l’Auto, the 2026 penalty could make new thermal cars a product reserved for high budgets. The threshold for triggering the penalty is lowered, and the amounts increase, which mechanically raises the cost of thermal vehicles while electric ones remain exempt.
This dual constraint (European standards on manufacturers, national penalties on buyers) creates a scissors effect that accelerates the shift in the sales mix. The available data does not yet allow for measuring the exact extent of this transfer for the second half of 2025, but the trend is visible in the registration figures from the first months.
What this changes for European manufacturers
European generalist brands find themselves in an uncomfortable position. Lowering electric vehicle prices to comply with CO2 standards compresses their margins on vehicles that are already less profitable than thermal ones. Chinese manufacturers, whose cost structure relies on advanced vertical integration (batteries, motors, electronics), do not face this problem to the same extent.
The question of profitability per vehicle sold becomes a top strategic issue. Some European groups compensate by maintaining high prices on premium thermal SUVs, but this strategy has an expiration date aligned with the regulatory calendar.
Chinese manufacturers in the European market: low prices and protectionist reactions
The massive arrival of Chinese brands (BYD, MG, and others in the launch phase) in the European market is the most structuring business fact of recent months. Their advantage rests on several pillars:
- A significantly lower battery production cost, thanks to control over the lithium and chemical component supply chain
- Production volumes that allow for economies of scale inaccessible to European factories still ramping up
- An aggressive pricing strategy, with models positioned below the prices of European equivalents in the most sold segments
The European Union has responded with additional tariffs on electric vehicles imported from China, which came into effect in 2024. These surcharges have not been enough to curb the market share growth of Chinese brands, which are adapting their strategy by announcing plans for assembly plants in Europe to bypass tariff barriers.
Leasing and corporate fleets: a discreet but massive entry channel
Chinese manufacturers are not limiting themselves to the private market. The long-term rental and corporate fleet market represents a rapid penetration lever. Fleet managers think in terms of total cost of ownership, a calculation where low-priced Chinese electric vehicles show a difficult-to-contest advantage over three to four years.
Field reports diverge on this point: some managers report concerns about residual value at resale, a parameter still poorly understood for brands without a long history in Europe. Others find that reduced maintenance costs and competitive leases more than compensate for this uncertainty.
Used electric market: a segment still under construction
The growing volume of electric vehicles on the road mechanically generates a used market that is beginning to structure itself. The first Renault Zoe, Nissan Leaf, and Tesla Model 3 reaching the end of their first ownership cycle are feeding a second-hand offer.
The main question concerns the battery. According to KBC Autolease, a well-inspected used electric vehicle offers more guarantees than many buyers imagine, particularly thanks to manufacturer warranties on batteries (often eight years) that still cover part of the vehicle’s lifespan in the second-hand market.
- The actual degradation of batteries after several years of use remains moderate on most recent models, with residual capacity generally exceeding initial expectations
- Battery health diagnostic tools (State of Health) are becoming widespread among professional resellers, which reduces the information asymmetry between seller and buyer
- The purchase price of a used electric vehicle remains higher than that of an equivalent thermal vehicle, but the gap is narrowing as supply increases
The structuring of this secondary market constitutes a leading indicator of the maturity of the sector. As long as resale is perceived as risky, some potential buyers prefer to wait, which also slows down the renewal of the new fleet. The coming months will reveal whether the normalization of diagnostic tools and the gradual decrease in used prices are sufficient to lift this barrier.