The Electric Car Price War Begins
The automotive landscape in 2025 is off to an electrifying start, with headlines buzzing about price cuts for electric vehicles (EVs). At the Brussels Auto Show, Renault unveiled its prototype for the upcoming Twingo E-Tech Electric, set to hit the market for under €20,000—a rare feat in the EV space. Developed by Renault’s Ampere unit in just two years and manufactured in Europe, the Twingo is part of the brand’s ambitious push to make electric mobility accessible to all. Fresh off its victory as Car of the Year 2025 for the Renault 5, the company is leveraging innovative pricing strategies to compete globally.
Pricing Strategies Amid Chinese EV Growth
European automakers face an uphill battle as Chinese EV sales soar. According to the China Association of Automobile Manufacturers, EV sales in China grew by 40% in 2024, with total vehicle sales climbing 4.5% to 31.4 million units. Chinese auto exports also jumped nearly 20%, nearing 5 million vehicles.
Meanwhile, European carmakers have little choice but to adjust pricing to win back consumers. Data shows that lower-cost vehicles, such as those under €20,000, are becoming scarcer. However, Unrae reports that vehicles in the A and B segments still account for 8.3% and 48.1% of the market, respectively, challenging perceptions of a “desert” in the budget car market.
Debunking Price Increase Myths
In Europe, the average price for new vehicles rose by just €228 in 2024, an increase of 0.8% from €29,868 to €30,096, contrary to claims of a €1,000 hike. Unrae, the National Union of Foreign Vehicle Representatives, dismissed the exaggerated reports as misinformation, emphasizing the importance of accurate data for public and policymaker trust.
According to Unrae, price increases often result from improved vehicle features, including advanced safety systems and infotainment technologies, rather than automaker speculation. The organization also stresses that price comparisons must account for consistent vehicle segments and sales channels to be meaningful.
Consumer Preferences Shift to Premium Models
Despite challenges from Chinese automakers, European consumers are favoring higher-end models. Unrae’s data shows a 17.3% increase in average prices for sports cars, while prices for premium sedans in the E/F segments dropped by 14.2%. Prices in the popular B and C segments have remained stable.
BMW Faces Declining Sales
The European market also saw a slowdown for BMW, which reported a 4% drop in global sales in 2024, delivering 2,450,804 vehicles. Declines in China and Germany—its largest markets—by 13.4% and 5.3%, respectively, were key contributors. Despite this, BMW’s battery electric vehicle (BEV) segment grew by 13.5%, reaching 426,594 units sold, offering a bright spot amid challenges.