According to Nikkei, data from US research firm Mobility Global shows that in 2025, the global average price of a pure electric vehicle was approximately $37,000 (about 24.96 million yuan), marking the first time it has fallen below the $39,000 (about 26.32 million yuan) average for hybrids. This milestone signals that the core competitive advantage held by Japanese automakers in the hybrid market is being eroded by the influx of affordable Chinese EVs.

The data reveals that the global average EV price in 2025 has dropped by 9% compared to 2020, while hybrid prices have risen by 16% over the same period. The primary driver behind the sustained decline in EV prices is the reduction in battery costs. Media estimates suggest that as of 2025, the price of passenger car batteries has fallen by 37% compared to 2020. China accounts for approximately 80% of global battery production capacity, and overcapacity in this sector is pushing prices lower. Furthermore, a growing number of automakers are adopting more cost-effective lithium iron phosphate (LFP) batteries. Industry giants like Renault and Volkswagen have announced their adoption of this technology in 2025.

The accelerated global expansion of Chinese automakers is another key factor. Data from the China Association of Automobile Manufacturers indicates that China's EV exports reached 1.64 million units in 2025, a more than 16-fold increase from fewer than 100,000 units in 2020. In Thailand, a major export destination, Chinese brands have gained consumer recognition due to their price advantages, now accounting for nearly 30% of new car sales in the country.

Looking at average selling prices by country, the price of EVs has already fallen below that of hybrid models in the Southeast Asian and South American markets. Japanese automakers, who have long relied on their fuel-efficient hybrid technology to compete with EVs on lower initial purchase costs and longer driving ranges, are now seeing this advantage diminish as high-value Chinese EVs flood the market.

In response, Toyota is pursuing a "full-line strategy," expanding its hybrid lineup while simultaneously enriching its EV offerings. Nissan, meanwhile, has designated China as its second most important export base after Japan. It has begun exporting EVs produced in China, targeting an annual export volume of 300,000 vehicles. The first model for this initiative is the N7, a pure electric sedan launched in China in April 2025.

The International Energy Agency (IEA) predicts that EVs and plug-in hybrids will account for 30% of global new car sales in 2026. Driven by rising oil prices due to the worsening situation in the Middle East, global EV sales are expected to grow rapidly in the 2026 fiscal year, with pure electric vehicle prices likely to continue their downward trend for some time.

Against this backdrop, the core challenge for Japanese automakers will be whether they can develop products that are uniquely attractive and avoid being drawn into a price war based on low-cost competition.