- Global average BEV price fell to ~$37,000 in 2025, undercutting hybrids for the first time.
- China’s lithium battery scale—~80% market share and rising LFP use—drove a 37% battery‑pack price plunge since 2020.
- Surging Chinese EV exports and cheap models like BYD Racco are eroding Japan’s hybrid advantage.
According to a report by Nikkei Asia citing Mobility Global data, the global average price of battery electric vehicles (BEVs) fell to around $37,000 in 2025, below the average $39,000 price of hybrid vehicles (HEVs) for the first time.
Data showed that between 2020 and 2025, the average global price of BEVs declined by around 9%, while hybrid vehicle prices increased by 16% over the same period.
The long-standing challenge of high EV prices limiting mass adoption is gradually easing as battery costs decline and supply chains mature.
China’s new energy vehicle supply chain has become a key driver behind this price shift.
Power batteries, one of the most expensive components in an EV, account for around 30%–40% of total vehicle costs.
In recent years, China’s lithium battery industry has expanded rapidly, accounting for around 80% of the global lithium battery market and driving continued declines in battery costs.
BloombergNEF data showed that passenger vehicle battery pack prices fell 37% between 2020 and 2025.
Meanwhile, the adoption of lithium iron phosphate (LFP) batteries has continued to expand.
Compared with traditional ternary lithium batteries, LFP batteries offer lower costs and avoid reliance on expensive materials such as cobalt.
As energy density and performance continue to improve, European automakers including Renault and Volkswagen have also begun increasing the use of LFP batteries in their EV models.
The expansion of Chinese automakers into overseas markets has further intensified global competition over EV pricing.
According to data from CAAM, China exported 1.64 million EVs in 2025, compared with fewer than 100,000 units in 2020, representing more than a 16-fold increase over five years.
For Japanese automakers that have long relied on hybrid technology as a competitive advantage, falling EV prices from Chinese manufacturers are gradually weakening that position.
BYD’s newly launched all-electric kei car Racco in Japan topped 1,000 orders in two weeks, with the carmaker aiming for 10,000 orders by end-2026.
Facing intensifying competition from EVs, Japanese automakers have started adjusting their strategies.
Toyota continues to pursue a “multi-pathway” approach, expanding hybrid offerings while increasing investment in battery-electric vehicles.
Nissan is attempting to leverage China’s manufacturing ecosystem by exporting China-produced EVs to overseas markets, with plans to reach annual exports of 300,000 units in the future.
Its first model for this push is the all-electric sedan N7, which launched in China last April.
The International Energy Agency (IEA) expects BEVs and plug-in hybrid electric vehicles (PHEVs) to account for around 30% of global new vehicle sales in 2026, suggesting that the pricing advantage of electrified vehicles could expand further.
Discover more from ChinaEVHome
Subscribe to get the latest posts sent to your email.
