Europe: Electric cars are 33% cheaper to drive than gasoline, while electric trucks approach cost parity with diesel

EVs are becoming the most cost-effective vehicle choice in Europe – Image: Elmir Jafarov/Pexels

As battery costs decrease and fuel prices remain high, electric vehicles (EVs) are becoming the most cost-effective vehicle choice in Europe according to a new report by the International Council on Clean Transportation (ICCT). The shift is reshaping vehicle markets and production across Europe and cutting the bloc’s fossil-fuel import bill.

“EV electric car drivers in Europe are paying about a third less than those with gasoline cars. Those savings are hard to ignore. They also explain why the car market keeps moving in one direction. We expect battery electric car adoption across Europe to scale up in the coming years if current policies are maintained,” says Marie Rajon Bernard, ICCT senior researcher and lead author of the report.

Battery electric vehicles (BEVs) charged on a mix of private and public charging were 33% cheaper to drive than their gasoline counterparts in 2025 in the EU—and the oil crisis starting in February 2026 has widened the gap further. In early 2026, the energy costs of combustion engine cars rose by 12%–36%, while those of battery electric cars remained largely unchanged.

In addition to lower energy costs, upfront costs of BEVs have already reached parity with gasoline cars in the three largest car segments in 2025 according to price data from 100,000 vehicles in Europe’s largest car market, Germany. According to the same study, the number of BEV models on the market quadrupled between 2020 and 2025.

Battery cost reductions leave room for lower prices

Batteries, the largest cost component of EVs, are becoming cheaper year after year. Globally, battery costs fell 35% from 2020 to 2025. As a result, when adjusted for inflation and vehicle characteristics such as range, the upfront costs of battery electric cars decreased by 18% between 2020 and 2025 in Germany. Internal combustion engine car prices, on the other hand, rose by 2% over the same period.

“We’ve observed that car prices haven’t fallen as quickly as battery costs have, which tells us there is more room for electric cars to get cheaper in the coming years. This is a critical moment for carmakers globally. Rather than reversing course, European carmakers will need to sustain and deepen their investments in electrification. The competition in this market will intensify,” says Peter Mock, ICCT Europe Director.

For trucks, the report finds that battery electric and diesel models could reach total cost of ownership parity in the long-haul segment as soon as 2030. Germany is already there: both regional and long-haul trucks have already reached cost parity, helped by road toll exemptions that favor zero-emission vehicles. As one example, a long-haul electric truck already costs 11% less to own and operate than its diesel counterpart.

“What many expected to be years away is happening now for trucks. In a sector where cost predictability is key, once the math favors electrification, fleets will switch. However, this will only happen if policies keep supporting them in the early years of the transition,” says Mock.

 Electric Vehicle production expands while fossil fuel imports fall

The favorable economics of the BEV powertrain, backed by policies such as the EU CO2 standards and national pro-EV schemes, are accelerating market uptake across Europe. In the first half of 2026, 22% of new cars sold were fully electric, and electric truck sales increased by 40% year over year. The shift in Europe is already paying off. Battery electric cars on the road today are saving the EU around €4.5 billion a year in fossil fuel imports.

The demand for EVs is also transforming car production. Combustion engine cars fell from 91% of total EU car production in 2020 to 72% in 2025, while battery electric cars reached 19% of total output.

The report was presented this week in Brussels and organized in partnership with the Irish Presidency of the Council of the European Union.

About the EV Transition Check

The EV Transition Check is a recurring ICCT assessment of the progress of Europe’s road transport sector toward zero emissions.  This second edition covers passenger cars, trucks, and buses and draws on a broad range of data concerning vehicle supply, pricing, running costs, charging infrastructure, vehicle registrations, and manufacturing capacity. The study offers a comprehensive data-driven assessment of the EV transition. It measures progress against key indicators including emission reductions, vehicle affordability, climate and health impacts, charging infrastructure, and industrial competitivenes.

The report was prepared by the ICCT, with support from Agora Verkehrswende (Germany), Alinnea (Spain), ECCO (Italy), Mobility in Transition (IMT-IDDRI, France), and PSNM (Poland), as well as the European Consumer Organisation (BEUC), and the Fédération Internationale de l’Automobile (FIA Region I).

NAN/ICCT 08-09-26

You might also like: