Mercedes is hiking the prices even of entry-level models like the A-Class hatchback. Drivers are increasingly only be able to buy versions of the car with bells-and-whistle options as standard.

Mercedes isn’t alone. Around the world, manufacturers are reaping the benefits of selling fewer but more expensive cars. In the US, average monthly payments for a new car nearly doubled from late 2019. And as battery-powered vehicles tend to cost more than the average combustion-engine car, the shift to EVs may make the affordability crisis even worse.

Eoin Treacy's view

Companies have clearly made the decision to push the cost of migrating from internal combustion engines to batteries onto consumers and governments. The increasing range of subsidies to support EV rollout and the increasing burden of carbon credit expense ensure companies can produce fewer vehicles and charge more for them.