A new report by automotive market experts, JATO Dynamics, has shown that over the past ten years, EV prices in Europe and the USA have grown significantly but in China they’ve been slashed by almost half. Could the West learn something from the Chinese model, though?

JATO Dynamics’ figures show that in China, which is the world’s biggest EV market, the average price of an EV has fallen by 47 per cent since 2011. In the same time period, prices in the USA and Europe have risen by 38 per cent and 28 per cent respectively.

Prices in the USA, a market which is well behind in the race to electrification, average prices are rising the fastest having climbed by over £8000 since 2011. This has been driven by the tax credit system, according to JATO, which offers more of an incentive on higher price EVs, accelerating the growth of the premium EV segment. However, this has had the effect of failing to help those on lower incomes to afford a clean car whilst leaving the low-cost EV segment lacking in choice across the pond.

We can’t exactly claim to be much better here in the UK where EVs are still the preserve of those with higher-than-average incomes. In terms of price, the UK is one of the worst markets when comparing the price of an ICE-powered vehicle compared to an equivalent EV. As of May this year, EVs were 50 per cent more expensive than ICE-powered cars on average. Similarly, the Netherlands is a poor performer with EVs 54 per cent more expensive, on average.

In Germany, Europe’s biggest car market, the picture is much more positive. Thanks to a range of subsidies and incentives, an average EV costs £34k compared to £31,600 for ICE. The only country in Europe that can claim EVs as being more affordable than ICE is Norway where you’ll pay £38,100 for an EV on average, but £45,400 for ICE. Again, this is down to heavy tax breaks and subsidies designed to encourage people to go green.

The Chinese model

China has committed to the development of affordable EVs to ensure that its population – which is typically poorer than those in European nations or the USA – can still afford to buy one. A host of start-ups have ridden a wave of funding and support provided by the Chinese government to the extent that such is the success, subsidies are gradually being phased out.

To some extent, China’s hand has been forced on the EV due to pollution, but this has happened alongside more positive moves from within the country. According to Ye Qi, member of VW’s Sustainability Advisory Council: “The urgent need to combat the country’s air pollution problem, the influence of visionary and entrepreneurial leadership, and the country’s significant financial subsidies all contributed to the impressive adoption rates seen in recent years. Looking ahead, as the climate crisis climbs even higher on government agenda, it’s more likely that Western countries will start to push EVs into the mainstream, with the same determination that China has done since 2013.”

Something else China has championed is small EVs suited to urban and short-distance driving. The embodiment of personal transport, it’s possible to buy a brand new, city orientated EV for £3200 and such is the popularity, they outsell Teslas by a significant margin.

In many ways, our car markets in the West are playing catch-up. Government subsidies are encouraging sales in many countries whilst additional public money is being poured into the infrastructure to support the move to electric transport. Innovation, driven by small and specialised manufacturers is propping up large OEMs, too – just like it has in China.

Perhaps the best lesson we could learn from China, however, is that most people don’t need two-tonnes of metal to take them a few miles to the shops. Personal mobility in the shape of vehicles like the Citroen Ami make much more sense for most local journeys, though the biggest barrier to more sensible transport choices is likely to be a psychological rather than a practical one. In that sense, China is way ahead of us.