EV prices are now significantly lower than hybrid prices globally, as falling battery costs and China’s expanding electric vehicle manufacturing capabilities help make EVs more affordable. The shift comes as rising fuel prices bring renewed attention to electrified vehicles, even as hybrids maintain a sales advantage over EVs during the first half of the year.
EV Prices Drop Below Hybrid Costs
According to a study by analytics firm Mobility Global, the global average price of EVs has fallen to around $37,000, Nikkei Asia reports. That figure is 9% lower than in 2020, while the average price of hybrids has increased 16% over the same period to $39,000.
The figures were calculated using vehicle sticker prices without subsidies and were also based on sales volume.
Although hybrids appear to have the edge over EVs in sales during the first half of the year, EV adoption continues to increase in emerging markets outside the U.S. That growth is helping push EV prices below those of hybrids in some markets.
China Helps Drive EV Prices Lower
Several factors have contributed to the declining cost of EVs, including the emergence of cheaper battery technology and the rapid expansion of China’s EV manufacturing capabilities.
Prices for lithium-ion, a key component of EV batteries, fell 37% between 2020 and 2025. Most EV manufacturers have also moved away from cobalt-based batteries in favor of lithium-iron phosphate (LFP), which has improved through continued development.
China’s expansion into overseas markets has added another major factor. Chinese brands such as BYD can build all components of their EVs and ship them to Southeast Asia, where the company is steadily expanding its presence.
In Southeast Asia, Chinese EVs cost less than or about the same as hybrids, giving consumers the option of switching to fully electric vehicles. BYD and other manufacturers have also begun establishing manufacturing facilities in the region, a move expected to continue driving prices lower.
Japanese Automakers Rethink EV Strategies
The biggest disruption is emerging in the mass-market segment, where legacy Japanese brands have been forced to rethink their strategies to remain competitive in a vital region.
Toyota, described as the biggest skeptic for EVs, has adopted a multi-pathway approach that offers battery electric vehicles alongside its more established hybrid electric vehicles.
Nissan has gone further by beginning to export Chinese-made EVs to other markets.
Electrified Vehicle Sales Expected to Rise
Forecasts point to strong sales for electrified mobility in 2026. The International Energy Agency expects EVs and plug-in hybrids to account for 30% of all car sales this year.
As fuel prices continue to influence consumer decisions, falling EV prices and expanding Chinese production are reshaping the competition between electric vehicles and hybrids across global markets.
