Electric car with glowing tech features symbolizing the balance between cost and innovation.

Electric Cars: Are Extra Features Driving Up the Price?

Kai Mendoza in Tech & Innovation December 2025 • 4 min read.

"New research reveals that fancy extras, not just battery costs, are a major factor in the rising price of EVs."

Electric vehicles (EVs) are essential to fight climate change by offering a greener alternative to gasoline cars. Despite this advantage, many people hesitate to switch due to the high initial cost. The common belief is that expensive batteries are to blame for the higher price tag and are hindering widespread adoption. But what if there's more to the story?

A recent study challenges this assumption by looking beyond battery costs to understand what really drives up EV prices. By analyzing data on EV features and market conditions from 2011 to 2023, the research uncovers surprising factors influencing how EVs are priced.

This article dives into the study's findings, revealing how consumer demand for extra features and powerful performance is reshaping the EV market. We will explore the implications for EV affordability, emissions, and what it means for the future of green transportation.

Beyond Batteries: Decoding the Real Cost of Electric Vehicles

Electric car with glowing tech features symbolizing the balance between cost and innovation.

For years, the narrative has been that EV battery costs are the primary barrier to making electric cars affordable. Mineral-related differences in manufacturing between EVs and traditional internal combustion engine vehicles (ICEVs) often get highlighted. ICEVs require only five of the eight minerals used in EVs, with even copper and manganese used in smaller quantities. The focus on battery costs has led to projections that price parity between EVs and ICEVs hinges on cheaper batteries through increased production and optimized chemistries.

However, the new study reveals a more complex reality. Contrary to popular belief, the main drivers of EV prices are the number of amenities, additional features, and dealer-installed accessories included as standard. These features reflect consumer preferences for vehicles that offer more than just basic transportation. Horsepower also significantly impacts the price, indicating a demand for powerful EVs.

Feature Density: A 1% increase in the number of features leads to a 0.745% increase in price.
Horsepower: A 1% increase in horsepower results in a 0.529% increase in price.
Survivability, Entertainment, Navigation, and Mechanical Features: These have the greatest influence on EV price. A 1% increase in these features can increase an EV's price by 0.477%, 0.434%, -0.164% and 0.109% respectively.

Interestingly, the study also found that EV range is negatively correlated with price, suggesting that "range anxiety" (the fear of running out of battery) might be less of a concern for consumers than previously thought. This challenges the idea that longer ranges are a primary driver of EV cost. The study suggests consumers are willing to trade off range for more features and power, similar to trends observed in the market for gasoline-powered cars.

The Road Ahead: Balancing Affordability and Sustainability

The findings highlight a critical challenge for the EV market: balancing consumer demand for feature-rich, powerful vehicles with the need for affordability and emissions reductions. As manufacturers cater to these preferences, EVs risk becoming more expensive and less environmentally friendly due to decreased fuel economy. To maximize the decarbonization potential of EVs, efforts must focus on incentivizing the production of less expensive models without sacrificing essential aesthetic and performance features. Addressing this balance will be crucial for achieving widespread EV adoption and meeting climate goals.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: https://doi.org/10.48550/arXiv.2403.00458,

Title: Prices And Preferences In The Electric Vehicle Market

Subject: econ.em

Authors: Chung Yi See, Vasco Rato Santos, Lucas Woodley, Megan Yeo, Daniel Palmer, Shuheng Zhang, And Ashley Nunes

Published: 01-03-2024

Everything You Need To Know

What are the main factors driving up the price of Electric Vehicles (EVs) beyond battery costs, according to recent research?

The study reveals that the primary drivers of EV prices are the number of amenities, additional features, and dealer-installed accessories included as standard. Moreover, horsepower significantly influences the price, indicating a demand for powerful EVs. The research indicates that the focus on battery costs has overshadowed other significant factors contributing to the overall price of EVs. Specifically, Feature Density, Horsepower, Survivability, Entertainment, Navigation, and Mechanical Features significantly impact EV prices.

How does the demand for features and horsepower impact the affordability and environmental friendliness of EVs?

Consumer demand for feature-rich and powerful EVs directly impacts affordability because these features and increased horsepower contribute to higher prices. Furthermore, as manufacturers cater to these preferences, EVs risk becoming less environmentally friendly due to decreased fuel economy. The findings highlight a critical challenge for the EV market: balancing consumer demand with the need for affordability and emissions reductions. To maximize the decarbonization potential of EVs, efforts must focus on incentivizing the production of less expensive models without sacrificing essential features.

Why is the focus on battery costs potentially misleading when discussing EV prices?

The common belief that expensive batteries are the primary barrier to EV adoption is challenged by the study. While battery costs are a factor, the research indicates that the inclusion of numerous amenities, additional features, dealer-installed accessories, and increased horsepower have a more significant impact on price. The study suggests consumers are willing to trade off range for more features and power, similar to trends observed in the market for gasoline-powered cars, implying that the focus on batteries has overshadowed other significant factors in EV pricing.

How does the study's findings on range influence the understanding of consumer preferences in the EV market?

The study found that EV range is negatively correlated with price, suggesting that "range anxiety" might be less of a concern for consumers than previously thought. This challenges the idea that longer ranges are a primary driver of EV cost. The findings suggest consumers are willing to prioritize features and power over extended range, mirroring trends in the gasoline-powered vehicle market. The consumer's behavior demonstrates the importance of feature-rich vehicles.

What are the implications of the study's findings for the future of green transportation and EV adoption?

The study highlights a critical challenge: balancing consumer demand for feature-rich, powerful vehicles with the need for affordability and emissions reductions to maximize the decarbonization potential of EVs. Addressing this balance will be crucial for achieving widespread EV adoption and meeting climate goals. Efforts must focus on incentivizing the production of less expensive models without sacrificing essential features. This would lead to increased EV adoption and reduce emissions, making green transportation more accessible and environmentally effective.