Every year we’re told the next breakthrough in battery technology will finally make EVs more affordable. Quietly, that’s already started happening… at least on the manufacturing side. According to a new study out of Germany, global battery costs have fallen by roughly 35 percent in real terms since 2020. Yet if you’ve been shopping for an EV lately, you’ve probably noticed they haven’t become dramatically cheaper. In fact, the median advertised price actually went up. Here’s why.

Read: Used Hybrid And EV Prices Have Jumped $3,600 Even After The Tax Credit Died

Researchers from the International Council on Clean Transportation (ICCT) analyzed more than 100,000 passenger car configurations sold in Germany between 2020 and 2025. When comparing equivalent models and adjusting for inflation, vehicle weight, power output, battery capacity, and electric range, they found battery electric vehicle prices fell by about 18 percent in real terms over the five-year period. Yes, prices fell by almost one-fifth. At the same time, internal combustion vehicles became roughly 2 percent more expensive.

The study attributes much of that price drop to falling battery costs. What’s particularly interesting is the gap between the roughly 35 percent decline in battery prices and the 18 percent reduction in vehicle prices. Researchers say manufacturers appear to have used some of those savings to increase driving range, improve vehicle specifications, or offset research and development costs instead of cutting sticker prices even further.

Why The Median Price Climbed

On top of that, the overall market tells us an even more interesting story. The study confirms that individual EV models became cheaper while the median advertised price across the entire German market actually went up, growing from around €38,000 ($44,000) in 2020 to €54,000 ($62,000) in 2025.

That’s largely because the number of available EV models exploded from 38 to 159 during the study period, with much of that growth coming from larger, more expensive vehicles in the lower-medium, medium and upper-medium segments. Buyers shopping for smaller, more affordable EVs still have relatively few choices, with mini and small cars accounting for just 14 percent of all BEV models on sale.

It’s worth noting that the findings reflect the German market rather than the United States, where incentives, taxes and consumer preferences differ considerably. Even so, the report highlights an important reality for anyone expecting dramatically cheaper EVs. Falling battery costs don’t automatically translate into lower sticker prices. Sometimes they become longer range, more equipment, or simply more expensive vehicles.

Germany’s turn to electric cars stopped being theoretical last month. Battery-electric models outsold every other powertrain in June, taking 28.4 percent of the country’s market and finishing ahead of hybrids for the first time. That figure would have looked absurd two years ago in a country whose industrial identity is welded to the internal combustion engine.

Read: Tesla’s Model Y Went From 42nd In January To Europe’s Best-Seller In March

Figures from the Federal Motor Transport Authority (KBA) reveal that 84,057 new EVs were sold last month, a 78.2 percent rise from June last year. This allowed EVs to narrowly edge out hybrids, which had been the most popular powertrain option the month prior. Hybrid registrations came to 83,315, a hair behind the EV total but still good for a 28.1 percent share.

Germany Car Registrations By Powertrain Type

Crucially, both EVs and hybrids are now comfortably outselling traditional petrol-powered vehicles, which held a 20.5 percent share of the market with 60,796 registrations in June. Trailing petrol-powered cars were diesels with 33,862 sales, or an 11.4 percent market share, slightly ahead of plug-in hybrids with 32,212 sold, enough for a 10.9 percent share.

Which EVs Are Most Popular?

The most popular EV in Germany last month was the Tesla Model Y with an impressive 6,023 sales recorded. This placed it well ahead of the VW ID.3 in second with 3,514 registrations, followed by the Skoda Enyaq with 3,383, and the Skoda Elroq with 3,315. Other cars among the top 10 best-selling EVs included the BMW X1, Mini (it’s unclear which specific model), Audi A6 e-tron, VW ID.7, Cupra Tavascan, and Mercedes-Benz CLA Electric.

The Model Y proved to be so popular that it was actually the third best-selling new car overall in June. It only trailed the VW Golf, which recorded 8,117 sales, and the VW T-Roc, with 6,808 units sold.

Although EV and hybrid sales are surging in Germany, the vast majority of the nation’s total vehicle fleet still relies solely on fossil fuels. In fact, there are currently 61.3 million registered vehicles on German roads, of which 59.3 percent are powered by petrol and 27 percent by diesel engines. Hybrids account for 6.5 percent while BEVs have a 4.1 percent share.

Germany Best-Selling EVs June 2026

KBA

Volkswagen Group Retail Deutschland (VGRD) has rolled out an “innovative salary conversion” program that enables shoppers to get discounts on electric vehicles. This isn’t pocket change as the company noted customers can save up to 50% compared to private leasing without a down payment.

The program is known as e.loop and it effectively sees employers lease a new EV for their employees with money taken out of their salary. That sounds a little convoluted, but the automaker said the employer signs an agreement with VGRD and then employees can select their desired vehicle online. “The monthly payment is deducted directly from gross income as part of a salary sacrifice arrangement, automatically resulting in a benefit in payroll taxes.”

More: VW’s New ID. Polo Starts Under $30K And Brings EVs To The Masses

Volkswagen suggests this is as simple as a four or five step process, and much of it can be done online. They went on to note the program should be attractive to employers as it enables them to take advantage of tax benefits for electric vehicles, helps retain and attract workers, and improves their Environmental, Social, and Governance (ESG) profile. They added it requires minimal administrative effort and provides access to everything from the Volkswagen ID.3 to the Porsche Cayenne Electric.

Employees get significant savings and all-inclusive ownership. This includes the vehicle, insurance, and maintenance. Volkswagen suggests the process is relatively straight forward and the hardest choice is selecting what EV you want.

Automobilwoche says the program is similar to company bike initiatives and customers can choose between 24 or 36 month terms. The program already appears to be a hit as VGRD said interest is “very high” and officials believe the e.loop program could account for 5-10% of new cars sales in Germany by 2030.

While the program sounds like a win-win for employers and employees, there appears to be some possible downsides. The biggest is that companies could get stuck with a car after an employee leaves the organization.

Chinese EV startup Leapmotor, which has expanded into global markets, including Europe, on the back of its partnership with Stellantis and its sales network, just posted record numbers for the first half of 2026. Once you see how cheap some of the company’s newest models are, the surge makes sense. In Germany, one of Leapmotor’s entry-level EVs can be had for just €48.90 ($56) a month, and no, that number isn’t missing a zero. That works out to less than most people spend on a monthly phone plan for an actual car with a warranty.

A couple of years back, the German government pulled its EV subsidies, and sales cratered almost overnight. The incentives returned this January, knocking up to €6,000 ($6,800) off the price of a new EV for a family with at least two children and a combined income under €45,000 ($51,500).

Read: Stellantis Turns A Tiny Chinese Hatch Into A Delivery Van That’s Light On The Van Part

With that subsidy in play, plenty of shoppers can skip the down payment and delivery fees entirely and worry only about the monthly bill. The Leapmotor T03, which retails for €18,900 ($21,600), currently runs just €48.90 ($56) a month across a 36-month term, with mileage capped at 10,000 km (6,213 miles) per year. When the lease ends, buyers can purchase the T03 outright for €11,139 ($12,700) or hand back the keys and shop around for something else.

Why Is It So Cheap?

While one could argue that a family earning less than €45,000 ($51,500) shouldn’t be looking at a new car but rather a used one, being able to lease and drive one for just €1,760 ($2,010) over three years is one heck of a deal.

“The vehicle’s extremely competitive pricing is made possible by Leapmotor’s high level of cost efficiency,” Leapmotor told Nikkei Asia in an interview. “One key factor behind this is the company’s extensive vertical integration. Additionally, the leasing rate, which starts at just 49 euros, is made possible by German government incentives.”

Leapmotor Sales Surge

Some observers figured Leapmotor was pricing the T03 this low to clear inventory, worried the compact EV would fall foul of new EU rules that require camera-based driver assistance systems, upgraded autonomous emergency braking, and enlarged head impact protection zones for pedestrians and cyclists. However, a Leapmotor spokesman has rejected this, stating the T03 complies with these new rules.

Through the first half of 2026, Leapmotor has sold 356,487 vehicles globally, a 95 percent increase over the same period last year. It enjoyed a particularly strong June, selling a total of 93,376 models, also a 95 percent year-on-year increase. Since its formation, the company has sold more than 1.55 million cars.

Zeekr, the upmarket arm of the Geely Group, genuinely believes its cars stand shoulder to shoulder with the best from Germany’s premium brands. The man running Zeekr in Europe staked that claim in a recent interview, even though the company’s European operations have been up and running for barely six month,

That executive is Lothar Schupet, who logged 23 years at BMW before crossing over. Under him, Zeekr has rolled out a handful of models on European roads: the entry-level Zeekr X, the larger 7X SUV, the 001 estate, and the new 7GT. The brand is courting fleet buyers ahead of private ones for the moment, mostly because it currently has no dealership network anywhere in the region yet.

“I am firmly convinced that our products impress with quality and performance,” Schupet told Car-Editors. “In my opinion, we are on par with all premium manufacturers. That’s the basic premise.”

Read: Zeekr’s New SUV Looks Like A Rolls, Hits Like A Hypercar, And Still Burns Gas

Based on our experience with the Zeekr 7X earlier this year, we can understand Schupet’s confidence. Jacked-packed with technology, the 7X feels every bit as premium as something from BMW or Audi, and yet costs significantly less.

Dealerships Are Coming

During the same interview, Schupet added that Zeekr’s initial goal in Europe was to reach as many business customers as possible, particularly those who had used vehicles from other premium brands in their fleets. As this has happened, interest from private customers has steadily grown. Although Zeekr doesn’t have a dealership network, it has established several test-drive centers and has begun accepting “a few hundred” orders from private buyers.

Zeekr hopes to have sales locations across five metropolitan areas in Germany by the end of this year, including Hamburg, Düsseldorf/Cologne, Frankfurt, Stuttgart, Munich, and perhaps also Berlin. These will join the 10 existing test-drive centers across the country.

Asked which existing dealers Zeekr hopes to bring into its network, Schupet said they’re aiming directly at the premium segment.

“Of course, we are specifically targeting dealers in the premium segment. These include the traditional German brands BMW, Audi, and Mercedes. But also Jaguar and Maserati dealerships that may currently have spare capacity and are open to something new. As a Geely Group brand, we are naturally also looking at Volvo and Polestar dealerships too,” he said.

No European Production, For Now

Asked if Zeekr is interested in building its electric cars in Europe, Schupet acknowledged it’s an option, but said there’s no need to do so at this stage.

“Strategically, there is the option of producing locally,” he said. “This has certain advantages, but also carries risks. The speed, flexibility, and agility with which things are done in China are not easy to implement in Europe. Bureaucracy also hinders many decision-making processes. While the punitive tariffs make it challenging to implement a sustainable business model with manufacturing in China… we have now found a business case that works.”