Affordable Chinese Models Drive Global EV Average Price Below Hybrids

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Driven by declining battery costs and the continuous rise of Chinese automakers with scale advantages in emerging markets, the global average selling price of electric vehicles fell below that of hybrid models last year. According to the latest data from automotive analytics firm Mobility Global, the average EV price last year was approximately USD 37,000, down 9% from 2020. In contrast, the average price for hybrid vehicles rose by 16% over the same period, reaching USD 39,000. Mobility Global’s calculations are based on manufacturer sticker prices, excluding subsidies, and are weighted by sales volume.

Lithium-ion batteries account for 30% to 40% of a vehicle’s total cost. With ample battery production capacity in China, which controls roughly 80% of the global battery market, battery prices have continued their downward trajectory. According to BloombergNEF, passenger vehicle battery prices cumulatively dropped by 37% between 2020 and 2025.

Concurrently, major automakers are increasingly adopting lithium iron phosphate (LFP) batteries, which eliminate the need for high-cost cobalt. Although LFP batteries were historically considered to have lower energy density compared to conventional lithium-ion alternatives, their performance has been steadily improving. Both Renault and Volkswagen announced last year that they would equip select new models with LFP battery packs.

Amid intense competition in the domestic market, Chinese EV manufacturers are accelerating their overseas expansion, further driving down global vehicle prices. Companies like BYD have achieved independent production of components ranging from batteries to chassis by leveraging vertically integrated supply chains and refining their cost advantages.

Previously, high price tags hindered the widespread adoption of EVs across most global regions. In markets such as China and Norway, EV prices have already reached parity with or fallen below internal combustion engine vehicles, resulting in significantly faster electrification rates. Emerging markets may soon replicate this developmental trajectory.

According to data from the China Association of Automobile Manufacturers (CAAM), China’s EV exports reached 1.64 million units in 2025, a substantial increase from fewer than 100,000 units in 2020. Consumers in key export destinations like Thailand and Mexico place high value on the cost-performance ratio of Chinese models, with Chinese brands now accounting for nearly 30% of new car sales in Thailand.

Based on average selling prices across different countries, EV prices in Southeast Asian and South American nations have already fallen below those of hybrid vehicles. Thailand is actively attracting investment to support its EV industry, with BYD and Great Wall Motor both establishing local manufacturing facilities. Yoshiaki Kawano, an executive at Mobility Global, noted: “Chinese automakers initially expanded their market share through high-volume compact EVs, but are now broadening their product portfolios to introduce larger and premium models with higher profit margins.”

Historically, Japanese automakers focused on hybrid technology, leveraging lower purchase thresholds and extended driving ranges to establish differentiated competition. Today, they are beginning to recalibrate their strategies. Toyota Motor has adopted a “multi-technology pathway” approach, simultaneously launching EVs and hybrids tailored to regional consumer demands. Meanwhile, Nissan is emulating its Chinese competitors by manufacturing EVs in China for export to overseas markets.

Sources

- Shanghai Metals Market (SMM) · Industry Terminal - Original Article Link: Affordable Chinese Models Drive Global EV Average Price Below Hybrids