Why the median price of electric cars rose in Germany (2020–2025), according to ICCT and Fraunhofer ISI

It sounds contradictory: battery prices have been falling steadily, and so have the prices of electric cars. Yet over the past five years, the median price of electric cars has risen.

That is one of the headline findings from a joint study by the International Council on Clean Transportation (ICCT) and the Fraunhofer ISI institute. The researchers reviewed more than 100,000 passenger-car configurations available in Germany between 2020 and 2025.

The key lies in how the market offering changed. While the real-world prices of like-for-like models dropped, many new electric cars entering the market were larger, higher-segment and more expensive. As a result, the middle point of the price distribution moved upwards.

Cheaper, but also more sophisticated

How the researchers compared prices fairly

To capture genuine price trends, the team tracked individual models over time, adjusted figures for inflation, and accounted for changes in specifications such as weight, power, battery capacity and driving range.

The pattern is clear: in real terms, prices for comparable electric cars fell by around 18% between 2020 and 2025. Over the same period, cars with internal combustion engines moved the other way, with real prices rising by roughly 2% once inflation is taken into account.

Across the same years, average global battery costs dropped by 35% to 37% in real terms. In nominal terms (without adjusting for inflation), the decline was smaller, at 21% to 24%.

That battery-cost reduction, however, did not fully translate into list prices. The researchers note that the roughly one-third increase in average driving range indicates part of the gain went into larger batteries, broader vehicle improvements, or into offsetting the research and development costs of electric platforms.

Why did the median price increase?

The median is the value that sits exactly in the middle of a distribution: half of configurations are priced below it, and half above it. Unlike the mean, it is less affected by a handful of exceptionally expensive models.

The shift in Germany’s electric-car mix

It was this median that rose. Despite the fall in real prices for comparable models, the nominal median price of electric cars on offer in Germany increased by 42%, from about €38,000 in 2020 to €54,000 in 2025.

Internal combustion models also became more expensive, but by far less. Their nominal median rose from approximately €41,000 to €46,000, an increase of 15%.

The gap is explained mainly by the changing composition of what was available. Over the period analysed, the number of electric models on sale grew from 38 to 159. Much of this expansion, though, was concentrated in the mid-size and upper mid-size segments-categories dominated by larger vehicles that are, by nature, more costly.

By 2025, the mid-size and upper mid-size segments already accounted for 73% of the electric models available. In the city-car and supermini segments, choice remained tighter, with 19 electric models compared with 35 internal combustion options.

The takeaway is that a market can become more competitive while looking more expensive on paper. Real prices for comparable electric models fell, but the product mix shifted towards bigger cars with more equipment and technology, or longer range. That pushed up the nominal median price across the offer.

Electric cars became cheaper when you compare like with like. What is still missing is a larger selection of affordable models in the lower segments.