Ford Authority

New Study Says Electric Vehicle Production Costs To Undercut ICE By 2027 In Europe


Today, one of the biggest obstacles in EV adoption is the fact that electric vehicles cost more than their ICE-powered counterparts, as numerous studies and polls have found. However, electric vehicle production costs are slowly declining, and eventually, most believe that EVs will one day be cheaper to produce and buy than ICE vehicles. The latest evidence of this comes to us via a new study from BloombergNEF commissioned by Transportation & Environment (T&E).

The study found that electric vehicles will finally reach price parity with ICE vehicles sometime between 2025 and 2027, at least in Europe. However, not every segment will reach this point at the same time. The study indicates that EV SUVs, crossovers, and sedans will be as cheap to produce as their ICE counterparts starting in 2026, while compact cars will follow in 2027. Light vans are expected to reach this point in 2025, with heavy vans following in 2026.

The current average price for an EV in Europe is €33,300 ($40,447 USD), while the average gas-powered vehicle comes in at €18,600 ($22,592 USD). T&E projects that both will cost around €19,000 ($23,078) in 2026, while EVs will drop to €16,300 ($19,798 USD) in 2030 and gas cars will average €19,900 ($24,171 USD)

However, there are a number of caveats for electric vehicle production costs to reach this level by 2027. For starters, European governments must continue to provide incentives for EV buyers, as well as enforce stricter CO2 targets moving forward. On the production side of things, automakers would have to continue to drive down costs and ramp up production, along with introducing new models. If all goes well, T&E predicts that EVs could present 100 percent of new vehicle purchases in Europe by 2035.

“EVs will be a reality for all new buyers within six years,” said Julia Poliscanova, senior director for vehicles and e-mobility at T&E. “They will be cheaper than combustion engines for everyone, from the man with a van in Berlin to the family living in the Romanian countryside.”

Meanwhile, Ford recently doubled its future investment in EVs to $22 billion and invested an additional $130 million in solid-state battery production as it looks to the future. It also opened Ford Ion Park – the automaker’s new EV battery research and development center – with an eye toward bringing battery production in-house in the future, a move that will certainly reduce production costs as Ford inches closer to its goal of fielding an all-electric European lineup by 2030.

We’ll have more on the future of electric vehicles soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.


Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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  1. Thurston Munn

    Notice this study is all about Europe where smaller vehicle have existed for years. Demands and expectations in the USA are far different than Europe.

  2. Mark B

    Battery technology will be a huge factor. Rare earth minerals are called “rare earth” for a reason. How the industry pre and post production deals with this has to be a large factor.

  3. Billy

    Note the article also mentions government incentives are needed for this to occur! Meaning the true cost is not on par with ice vehicles. Current ev prices have recently risen and fallen. While a shift will occur, forcing it down consumers will backfire.

  4. Jean-Francois Rivard

    The article’s premise is bogus…

    Mixing the EV vs ICE cars prices plus trying to extrapolate EU vs US prices, and hoping to turn that into a crystal ball is ludicrous.

    For starters, you can’t compare the “Average price” of an ICE car vs the “Average Price” of an EV. EV’s come loaded with tech features not found on ICE cars + most of the ICE version’s luxury options come standard on the “Base” EV models.

    For a real life / current price EV vs ICE comparison, you need to compare the VW ID.4 with the GTI or comparably equipped luxury version of the Golf.

    Now for mixing US vs EU prices…

    The German price for a 2021 Golf GTI is €37,607 or US $44,164 + 16% value added tax we’re talking $51,620 or so “out the door” in the “home land” at current exchange rates.

    You compare that with the current $ 35,145 in the US + about 6.6% ad valorem =
    $ 37,465 that’s a whopping $14,155 or 40% more for the Germans than what we pay for a GTI.

    Apples and oranges pricing on EU vs USA for a well established, mainstream car.

    Conversely, A 2021 Volkswagen ID.4 EV starts at $39.995 and tops at $48,175 today in the USA.

    So right here, right now: The electric model is already comparable / cheaper than a GTI once you factor the tax incentives..

    Bottom line: You can make graphs and “Studies” say whatever you want that doesn’t mean it makes sense.

    1. Brett Foote

      The report concerns Europe, not the U.S. That’s made clear in this article. Also, USD converted prices are provided as a reference point.

      1. Stalkbroker94

        That requires people to read more than just the headline. Most of the people who would critique the articles like that are the same ones who overlook the current writing position that’s open at Ford Authority. They act like they could do better while never bothering to attempt proving it. Sound article, Mr. Foote.

  5. Jean-Francois Rivard

    Neither responses address the fact that the price parity isn’t the point. Which is the real thrust of my comment. That’s how the article concluded: In so many years the price parity will make electrics a reality.

    The price parity is already here when you compare apples to apples and no, it isn’t driving every man to buy an EV. There’s far more to the equation than this myopic/ pointless article is missing.

    And I’m not an EV hater. I owned one / my family put 45,000 miles on it in 3 years to great benefit.

    1. Brett Foote

      The article doesn’t conclude that, the study does. If you want to argue the semantics of the study, you might want to do so with the folks that conducted it.

  6. Lee

    Bloomberg and T&E did the study, right Brett? Boy, now there’s a reliable/believable source, right Brett(insert sarcasm here)?
    Maybe y’all should get Bloomberg or some other totally reliable/believable source to study why EV’s are unsafe, battery operated, polluting pieces of junk.


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