Seismic shifts are occurring in the automotive world in 2025, and one of the most significant is the growing affordability of electric vehicles. The rulebook for the industry is being rewritten, and cheaper EVs are at the forefront of this change. With the anticipated arrival of the Volkswagen ID.Every1, alongside models like the Renault 5 E-Tech and Fiat Grande Panda, electric cars are becoming viable options for more consumers.
For those who thought electric vehicles were out of reach financially, there’s good news. The high price of EVs has been a major barrier to widespread adoption across Europe. Lowering the cost is a key factor in changing consumer behavior. Volkswagen anticipates the production version of the ID.Every1, the ID.1, will cost from just £17,000 when it launches in 2027.
So, what’s making electric cars more affordable? Simply put, economies of scale are starting to take effect. Initially, manufacturers launched EVs with higher prices and lower volumes because of the cost of initially developing the new technology. As a result, the average price of an EV in the UK reached around £46,000, which is a significant investment for many.
“As electrification progresses and the work on the battery cells, the chemistry, and the formats have progressed… you get a real trajectory for the battery cost that enables small car electrification,” Volkswagen chief Thomas Schäfer told CAR magazine. “You need scale for it, in order to get it done. To get a business case going, you need numbers and the technology that you can scale.”
BloombergNEF, which monitors the cost of lithium-ion battery technology, reported that energy storage prices hit a record low last year, with another $3/kWh drop projected in 2025.
These trends translate to lower costs for manufacturers and, subsequently, consumers, as electric vehicles move closer to price parity with their internal combustion engine counterparts. This is why large automotive groups can now introduce smaller, more affordable EVs. The Volkswagen Group, for example, can spread the development costs across various small VWs (ID.1, ID.2), Cupras (Raval), and Skodas. It’s also possible VW’s collaboration with Ford might lead to Ford models leveraging the lower-cost MEB platform in the future. Could a small electric Ford Fiesta or Ka be on the horizon?
It’s worth noting, however, that VW is not the only player. Brands like BYD, Citroen Dacia, Fiat, Hyundai, Renault, and Vauxhall already offer a variety of affordable EVs. These manufacturers also have access to shared platforms, batteries, and EV expertise that can be scaled across their brands to drive prices down. This trend toward more affordable EVs is a welcome development in 2025. As EVs continue to become more price-competitive, more drivers will start to consider them.
