Why EVs under €25,000 are reshaping Europe's car market in 2026

Electric cars priced below €25,000 are moving from a niche into a mainstream segment of Europe's auto market in 2026. According to the Brussels-based campaign group Transport & Environment (T&E), sales of models starting under that threshold are set to rise sevenfold this year compared with 2024, as manufacturers finally respond to demand for cheaper battery-electric vehicles.

What changed in 2026

T&E's cars director, Lucien Mathieu, said in the group's October 2026 EV progress report that "the issue was not demand, but what they had to offer," pointing to a lack of affordable models as the main brake on the segment in previous years. That gap is closing: the number of battery-electric models priced below €25,000 on sale in Europe has doubled compared with the previous year, with four of those models priced under €20,000, T&E reported.

Almost 40 new electric models were launched in the first half of 2026 alone, pushing the total catalogue of mass-market battery-electric vehicles (BEVs) available in Europe past 150, according to T&E. The group expects around 60 new EV models to reach the market by the end of 2026 — close to four times the yearly average of roughly 15 new launches recorded between 2021 and 2025.

Which models are driving the shift

Among the cheapest entrants are the Renault 5 E-Tech and the Chinese-made Leapmotor T03, two of the sub-€25,000 models already on the market in Europe. Spanish outlet Movilidad Eléctrica listed several sub-€25,000 models on sale this year, with starting prices and ranges that vary significantly by battery size and trim.

Demand has also shown up at a higher tier of the market: Volkswagen's ID. Polo had already drawn more than 40,000 orders and a ten-month waiting list, T&E said, illustrating pent-up appetite for compact electric cars generally.

The bigger market picture

The affordable-EV surge is occurring alongside overall growth in electric car sales. T&E's October report put BEV sales in the EU and Norway at 1.64 million units between January and August 2026, up 45% from the same period a year earlier. Battery-electric cars took a 22% market share in the second quarter of 2026, the first time they outsold petrol-only cars over a full quarter, according to the group.

Spanish outlet Híbridos y Eléctricos reported related figures from industry data showing that EVs' overall share of new car sales reached 21.7% in the January–August 2026 period, up from 15.8% in the same months of 2025, with hybrids still leading overall at 36.6%. The outlet noted that European manufacturers control about 60% of the EV models currently available on the continent, while Chinese brands account for roughly 21% of the catalogue.

An earlier T&E report, published in March 2026 and cited by Gulf News, had already flagged the price trend: the average EV price in the EU and Norway fell 4%, or about €1,800, to €42,700 during 2025, a decline T&E attributed partly to new, competitively priced small models entering showrooms. At the time, EVs held a 19% share of new car sales in the EU and Norway for 2025, up from roughly 14% the year before.

Why it matters now

The expansion of sub-€25,000 EVs comes as the European Union debates whether to soften its 2035 target to end sales of new petrol and diesel cars, with carmakers arguing the deadline is unrealistic, according to Gulf News. T&E has used its sales data to argue that EU CO2 standards are already helping bring cheaper electric cars to market, stating in its March 2026 report that the rules had enabled large numbers of Europeans to access more affordable electric vehicles.

T&E also linked the shift to energy costs, estimating that an oil-price spike cost EU road users €53 billion and that drivers who had switched to an EV at the start of that spike would have saved around €350 per vehicle by mid-September 2026.

Analysts at T&E project that by 2028 roughly ten additional models priced below €20,000 could reach the market, with some approaching €15,000, according to Híbridos y Eléctricos, suggesting the affordable segment identified in 2026 is expected to keep expanding rather than being a one-off.