The study, titled “Small and Profitable: Why Affordable Electric Cars in 2025 are Feasible,” delves into the economics and market dynamics that make this shift possible. Key findings indicate that automakers can feasibly produce small electric cars at prices around €25,000 while maintaining profitability. This marks a significant milestone in the industry, aligning with Europe’s ambitious climate goals and the increasing demand for electric mobility.
The report highlights a notable transition in consumer preferences and manufacturer strategies. Despite the recent supply chain challenges and increased production costs, automakers have experienced higher profits per vehicle. This profitability has been partially driven by a shift towards producing larger, more expensive vehicles like SUVs. However, the tide is turning as demand grows for smaller, more affordable cars.
T&E’s research, including surveys conducted across major European countries, indicates a strong consumer interest in €25k BEVs. This price point is seen as a catalyst for increasing the sales share of fully electric cars to 35%, potentially adding an extra million electric vehicles on the roads annually.
Several major car manufacturers have already announced plans to introduce smaller and cheaper BEV models. Citroën, Opel, Fiat, Renault, VW, Skoda, and Tesla are among those who have committed to launching such models, with prices ranging from €20,000 to €25,000. These vehicles, expected to be available between 2024 and 2027, will offer a practical and sustainable option for a broader range of consumers, including low- and middle-income households.
This shift is not only significant for new car buyers but also has implications for the used car market. As more affordable BEVs enter the market, they are expected to become accessible at even more competitive prices in the used car market after a few years, offering a viable alternative for a wider consumer base.
The study concludes that a concerted strategy involving European, national, and local measures is crucial to ensure that European automakers prioritise the production of smaller, more affordable vehicles. Such a strategy would counteract the current trend towards resource-heavy, expensive SUVs and accelerate the transition to electric mobility
Source: Small and profitable: Why affordable electric cars in 2025 are feasible & How leasing companies can become a key driver of affordable electric cars in the EU | Transport & Environment
