Agora analysis: E-cars already cheaper than combustion engines today

The most important results at a glance:

1. Pure electric cars are already an economical alternative to combustion engines in terms of overall costs with the state-granted benefits. Total costs mainly include depreciation, energy, taxes and insurance, as well as maintenance. For example, a mid-size gas-powered model in the Golf class costs just over 42,000 euros in the five years after purchase as a new car, while a comparable electric model including purchase premium averages just over 40,000 euros. Electric cars are now available in all vehicle classes. → To highlight total costs as a criterion in purchasing decisions, the total costs accrued over the holding period should be prominently displayed as part of the reform of the Energy Efficiency Labeling Ordinance.
2. Purchasing prices for battery-electric vehicles are now overall comparable to those for combustion engines thanks to purchase premiums. Most gas-powered cars cost between 29,000 and 53,000 euros at purchase; Electric cars with environmental bonuses and innovation premiums range between 30,000 and 58,000 euros. → Since price is the most concrete and prominent cost factor for potential buyers, purchase premiums for emission-free vehicles should be maintained for the time being and only gradually reduced as positive cost trends for electric cars compared to combustion engines progress.
3. In large vehicle classes, pure electric cars are already cheaper than combustion engines even without purchase premiums – both in purchase price and in total costs. In the E-class, a gas-powered car incurs total costs of around 77,000 euros over the first five years on average, while an electric car of the same class is already available for an average of 71,000 euros. Purchase premiums usually do not play a role here, as only vehicles with a purchase price below 65,000 euros are eligible for funding. In the Golf class and smaller vehicle classes, however, electric cars are significantly more expensive than comparable combustion engines without subsidies. → To make electric cars available to budget-conscious buyers, support measures should specifically target medium and small models. In the higher price segments, purchase premiums could already be reduced today.
4. Plug-in hybrids are the most expensive option in terms of total costs on average. The total cost for a five-year first ownership of plug-in hybrids is on average over 61,000 euros without subsidies, compared to around 57,000 euros for diesel or non-subsidized electric cars. Including purchase premiums, the average total costs are just under 58,000 euros for plug-in hybrids or 51,000 euros for electric cars. Additionally, their emissions balance strongly depends on usage behavior. → To ensure the climate protection effect of subsidies, lawmakers should link their allocation to the electric driving share for plug-in hybrids: Only vehicles that are predominantly used electrically should be eligible for funding. In the future, state subsidy measures for electromobility should also target the used car market. This analysis focuses only on new cars because the electrification of the vehicle fleet begins with them.
5. Commercial fleets are particularly important for getting electric vehicles into circulation due to their high share of the new car market (about 64 percent). Further incentives are needed to support electromobility in the used car market as well. → In addition to purchase premiums for battery-electric used cars, the state could focus on usage costs, for example by pricing and taxing energy sources based on CO2 emissions. The cheaper electricity becomes compared to gasoline and diesel, the more demand for electric cars will rise in the used car market.