Electric cars and light vans are set to reach cost parity with internal combustion engine (ICE) vehicles from 2027 at the latest, according to a new BloombergNEF study commissioned by Transport & Environment (T&E).

The forecast includes all light vehicle segments in Europe, with the earliest cost parity happening from late 2025 at around €20,000 ($24,330) for a C segment vehicle. The estimate is for a pre-tax retail price in Europe, Kallanish notes.

Electric sedans (C and D segments) and SUVs will be as cheap to produce as petrol vehicles from 2026, while small cars (B segment) will follow in 2027. Light electric vans will be cheaper than diesel vans from 2025 and heavy e-vans from 2026, according to the study.

“Falling battery costs, new vehicle architectures, and dedicated production lines for electric vehicles will make them cheaper to buy, on average, even before subsidies,” the T&E said on Monday.

“EVs will be a reality for all new buyers within six years. They will be cheaper than combustion engines for everyone, from the man with a van in Berlin to the family living in the Romanian countryside,” says Julia Poliscanova, senior director for vehicles and e-mobility at T&E.

The study projects battery pack prices will fall to $61 per kilowatt-hour in 2025, from $137/kWh in 2020 thanks to improvements in four areas: lower material costs, higher energy density, increase in output and decrease in scrappage rate. Prices could drop to $58/kWh by 2030 (see related story).