The Price of Progress: Why EVs Are Still Out of Reach for Many
By Liz Foose
Despite their environmental promise and futuristic appeal, electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) remain financially out of reach for many people.
While their presence in the market and on the roads continues to grow, the steep price tag remains one of the biggest barriers to wider adoption—keeping the EV revolution from reaching full charge.
A buyer’s guide of 101 EVs and PHEVs, published in April 2025 by Shift2Electric, an EV business consulting and training company supported by the American Lung Association and Minnesota Clean Cities Coalition, indicated that the average price of these vehicles was a staggering $66,660. Notably, only one of the 101 models listed was priced under $30,000, while more than half ranged between $50,000 to $100,000. In fact, the average price exceeds the annual median income in several U.S. States.
It’s worth noting that some ultra-high-end models priced above $100,000 skew the average upward, and many options do fall in the $30,000-$75,000 range—comparable to some traditional gas-powered vehicles. Still, until more affordable models hit the market, EVs will remain out of reach for most consumers.
Interestingly, PHEVs tend to cost more than EVs, averaging $70,218 compared to $64,760. That’s largely due to their dual power systems—internal combustion engines paired with electric motors. EVs, on the other hand, operate solely on electricity. Both types tend to be pricier than their gas-powered counterparts, not only because they’re produced in smaller volumes but also because they rely on more advanced, high-cost materials such as lithium-ion batteries, whose soaring demand plays a major role in driving up costs.
But manufacturing costs aren’t the only factor. Pandemic-era supply chain disruptions sent shockwaves through the auto industry, halting new vehicle production and sending prices soaring as demand outpaced supply. Between December 2020 and December 2021, new car prices increased by 11.7 percent, and used car prices increased by about 37 percent. Although the market has since stabilized, by early 2024, vehicle prices were still about 20 percent higher than in 2021.
As sticker prices climb, so do auto loans. By April 2025, the average loan for a new car reached $41,572, which is typically financed over five and a half years at an interest rate of 6.35 percent. Used cars weren’t far behind, with average loans of $26,468 over five years at an 11.62 percent interest rate.
This growing financial burden is locking many buyers into larger, longer and more expensive debt. But there’s a long-term payoff worth noting: electric and plug-in hybrid vehicles can cut costs over time. With no oil changes and far less engine maintenance, EVs are cheaper to keep on the road. Fuel savings add up, too. Depending on location, EV drivers can pocket up to $2,200 a year, while hybrid drivers may save as much as $1,500. However, the promise of savings means little if most drivers can’t afford the upfront cost.
High upfront costs put EVs out of reach for many households—especially working-class families in historically underserved neighborhoods already burdened by air pollution and high transportation costs. While EVs offer real environmental, health and long-term financial benefits, those benefits will remain limited unless cleaner, more affordable transportation is accessible to the very communities that need it most.
Making EVs and PHEVs more affordable isn’t just about innovation. It’s about ensuring clean transportation is truly accessible. It’s about delivering public health benefits, lowering emissions and creating a more equitable, sustainable future. But if only a fraction of people can afford to make the shift to clean transportation, the environmental impact will fall short.
For real progress, addressing the affordability gap is essential—not only to accelerate EV adoption but to ensure the benefits of cleaner, healthier transportation reach everyone. Policymakers, manufacturers and communities must work together to lower costs, expand incentives and invest in equitable access. Only then can we drive toward a future where electric vehicles aren’t a luxury, but a practical choice for all.
