The shift to electric mobility continues to transform the global automotive market , with robust sales of electric cars expected by 2024, totaling around 17 million units. Despite this growth, experts point out that market expansion depends crucially on the affordability of vehicles, especially in emerging markets and among mass-market consumers.
China leads the way with affordable cars, while Europe and the US face price barriers
China is solidifying its position as a leader in the democratization of electric cars , with around 60% of models sold in 2023 costing less than combustion-powered cars. This reality reflects a decade of government incentives and technological advances, such as the reduction in the price of batteries. In the first half of 2024, 95% of small cars sold in the country were already electric, contributing to one in two vehicles sold in the Chinese market this year being electric.
In Europe, however, the picture is different. Electric cars remain largely in the premium segment, with prices around 40% higher than those of combustion-powered vehicles. This disparity is a significant barrier to mass adoption, according to the European Commission. The average price that European consumers consider acceptable is €20,000, but affordable electric models are still scarce. In the United States, despite the reduction in the price premium for electric vehicles to 20% by 2023, the cheapest models still start at around $30,000, well above the most popular combustion-powered options.
Emerging markets and the need for compact and economical models
In emerging markets, affordability of electric cars is a key issue. In India, models such as those from Tata Motors, priced under $15,000, are starting to gain traction, but they face stiff competition from combustion-powered cars, which average around $7,000. Vietnam is a promising example, with VinFast launching compact SUVs priced under $13,000, competing directly with Chinese models.
Despite these advances, a global challenge remains: the preference for SUVs and larger vehicles. By 2023, 60% of global electric car sales will be SUVs or larger models , a trend that makes the vehicles more expensive and limits their penetration into the mass market.
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