Electric cars vs. combustion cars: the price gap narrows further. "subsidies are useless

For a long time, price was the number one argument against electric cars. Too expensive, reserved for a wealthy clientele, dependent on public subsidies. By 2025, however, this argument is starting to crumble. In Germany, Europe's largest automotive market, a study by the Center Automotive Research (CAR) in Bochum shows that the price gap between electric cars and equivalent combustion-powered models has narrowed considerably in just one year, without any public support. A strong signal... but one that needs to be qualified when we look at the case of our Italian manufacturers.

Germany as a laboratory for price convergence

According to CAR, an electric car still cost on average more than €7,300 more than an equivalent internal combustion model at the start of 2025. By December, this gap had narrowed to just €1,340. The study is based on an analysis of the transaction prices actually paid by buyers for the 20 best-selling electric and combustion models in Germany. Manufacturers applied significant discounts on both sides: on average 18.1 % for electrics and 19.3 % for combustion engines. As a result, the market share of electric cars in Germany has risen from 13 % to over 22 % in one year, with no purchase incentives and no significant acceleration in recharging infrastructures. For Ferdinand Dudenhöffer, Director of CAR, the conclusion is clear: the electric car has found its place in the market, and further subsidies would be pointless, if not counter-productive.

Italian brands face the reality of list prices

But does this flattering picture of the German market really correspond to the reality of Italian models? To find out, we conducted our own analysis, comparing strictly equivalent models offered in both electric and hybrid versions. On paper, the conclusion is clear: the price gap remains significant. The electric Fiat Grande Panda costs €22,400, compared with €18,400 for the hybrid version, a difference of around 22 %. The electric Fiat 600 climbs to €30,900, while its hybrid version starts at €24,799, a difference of almost 24 %. At Alfa Romeo, the electric Junior is priced at €38,500, compared with €30,250 for the hybrid, a difference of 27 %. Finally, the Lancia Ypsilon electric reaches €34,800, while the hybrid version starts at €24,800, a spectacular differential of 40 %. On these four models, emblematic of the Italian revival, the average difference remains around 28 %. A far cry from the near-parity observed across the Rhine. Of course, these are prices without discounts. We would need to know the price actually paid by buyers after discounts to match the German study.

The gap is closing... but not at the same rate

One point is worth emphasizing, however. The model with the smallest gap is also the most recent: the Fiat Grande Panda, launched in 2025. Conversely, the biggest gaps are for models introduced earlier, in 2023 or 2024, such as the Lancia Ypsilon, the Alfa Romeo Junior or the Fiat 600. This suggests a clear trend: the more recent a model is, the more the pricing strategy between electric and combustion tends to converge. Economies of scale, steadily falling battery costs and optimized platforms all play in favor of new launches. But for models already on the market, the rebalancing is taking place more slowly.

There is also a major bias in the overall reading of these studies. If the gap between combustion and electric cars is narrowing, it's not just because electric cars are becoming cheaper. It's also, and perhaps above all, because gasoline-powered cars have seen their prices rise sharply in recent years. Stricter standards (CAFE, GSR 2, EURO 7), rising industrial costs, the increasing complexity of hybrid powertrains: internal combustion is no longer the "cheap" solution it once was. This mechanical inflation mechanically contributes to bringing the two technologies closer together, even without a price revolution on the electric side.

Towards true parity... but not yet for everyone

The trajectory is clear: the market is heading towards price parity between electric and combustion engines over the next few years. Some exceptions already exist, such as the Mini Cooper cited by CAR. But for Italian brands, the reality remains mixed. By 2025, electric will still be a significantly more expensive choice, especially for models launched before the latest wave of industrial optimization.