OneWedge

You probably have seen articles lamenting how electric cars are less affordable than gasoline cars for the average buyer.

Data however paint a different picture. First of all, the Kelly Blue Book reports that a Tesla Model3 is now about $5,000 cheaper than the average car sold in the U.S. but I live in Europe, so I wanted to look at how prices evolved in my neck of woods.

Statista offers a not-so-new dataset comparing ATP (Average Transaction Prices) in Europe between 2015 and 2020, based on data from the ICCT, so I used that.

Statista ranks in its chart the countries on the basis of 2020 ATP, which in my opinion does not deliver the most relevant information contained in the data, so instead I chose to rank them by absolute EUR variation in these five years, obtaining this chart:

The first bit of information is that the ATP of cars in pre-Brexit Europe (green bar) has grown in Euro value over €4,000 (not every EU country is included in the chart); Italy (yellow bar) grew slightly more than the EU average.

If instead you calculate the % increase, and rank countries by this metric, the chart is different:

with Italy ranking ahead of Switzerland, France, UK with nearly a 20% increase vs. an EU average of about 15%.

In 2020 the share of electric cars in Europe and the world was well under 10%, so their contribution was minimal.

Conclusion

The conclusion is IMHO straightforward: the trend towards bigger, taller and more massive cars started way before EVs were a factor is sales of new cars and is motivated by the (legitimate) desire of carmakers to improve their profitability.

This obviously made new cars less affordable for the lower income layers of Western countries population, vacating (so to say) a niche that is likely going to be occupied by Asian manufacturers. regardless of the powertrain: the fact that a larger share of these lower ticket items is going to be electric is rather a reflection of the downward pressure on prices to fit the spending bracket.