Why is Australia enjoying an electric car price war?

Some have called it the Tesla graveyard – hundreds of new electric cars parked in Melbourne Harbor, waiting for their owners.

Critics say the scene is a sign that Australia’s soaring electric vehicle sales have finally hit a speed bump and are slowing down as they have in other countries.

But industry experts and global market reports paint a different picture.

Rather than being a graveyard in Australian ports, they say the scenes prove that Australia is finally becoming a bigger player in the global market for low-emission transport.

They also say Australian drivers will benefit from a price war as brands compete for a greater share of the market, and Australia becomes a prime target for Chinese carmakers facing tariffs in other parts of the world.

The sea of ​​Model 3 and Model Y vehicles is a welcome sight for the national president of the Tesla Owners Club of Australia, Peter Thorne, who remembers when vehicles were hard to come by and deliveries took months rather than weeks.

“With Tesla cars today, you can place an order and you’ll get your form faster than you can fill out the paperwork because they’ve got it in the country and the stock is now readily available,” he told AAP.

“This is happening to all electric car brands at the moment, so where the wait used to be six months, it’s now six weeks, four weeks or two weeks.”

While the US carmaker once offered one of the only electric cars on sale in Australia, it now faces much greater competition.

Increased competition has led Tesla to lower its prices, with two major cuts in April alone.

The price of the Tesla Model Y electric SUV has dropped from $69,300 in 2023 to $55,900 this year, just $1,000 more than the company’s entry-level Model 3.

Strategic price reductions

“Their cost reductions are very strategic, designed to sell specific models,” Thorne says.

“BYD is in the same boat and they will have to be really competitive in terms of their costs (to compete).”

Tesla faces strong competition in Australia from the Chinese company BYD, which set a record in May by selling 1,914 cars, compared to 3,567 Tesla cars.

Both brands have cut prices, with BYD cutting the cost of its Atto 3 SUV by more than $3,500.

Other companies that have cut electric car prices include MG, Renault, Peugeot, Lotus and GWM, which has offered a permanent $4000 discount on the Ora to make it the cheapest electric car in Australia.

Discounts range from $49,010 on the luxury Lotus Eletre to on-road toll included with BYD Seal Premium.

Chris Jones, national president of the Australian Electric Vehicle Association, says the changes will ultimately benefit motorists considering their vehicle options.

Electric vehicles are getting cheaper

“What we are seeing is a price war, and new electric vehicles are getting cheaper,” he says.

Dr Jones says intense competition is fueling this trend as traditional brands expand the market and more Chinese brands launch cars in Australia.

“China makes good, cheap, plentiful electric cars,” he says.

“They have a willing market in Australia and we have no problem with Chinese-made electric cars – we love them.

“Tesla is trying to find a way to sell in this market, and they will have to come up with a lower-priced, lower-spec car that competes at the lower end.”

Ten Chinese car brands have confirmed their plans to launch electric vehicles in Australia in the coming months including Leapmotor, Zeekr, GAC Motor, Geely Auto and Skywell.

But Hussein Zia, professor of future urban mobility at Swinburne University, says Chinese carmakers could target Australian motorists more aggressively in the future after the European Union announced higher tariffs on their cars.

A duty of up to 38.1 percent will be added on Chinese-made vehicles imported into Europe from July to support the local manufacturing industry.

Since Australia no longer has a domestic industry to protect, Professor Dea says it does not need similar tariffs and Chinese brands could seek to bring more of their cars into the country.

“We have a lot of luxury electric cars for sale now, high-end SUVs,” he says.

“What we have seen from China is small and medium-sized electric vehicles, which is what a lot of people want to buy.”

He says having a greater range of battery-powered vehicles for sale in Australia will help boost their popularity, which is still growing but not at the same rate as 2023.

Global electric vehicle sales will rise by 20% in 2024

The BloombergNEF 2024 Electric Vehicle Outlook report released Thursday concludes that electric vehicle sales are expected to rise to 20 percent in 2024 while gasoline vehicle sales peaked in 2017.

But electric cars are seeing different growth rates in different countries, with sales falling in Italy and Japan while rising in the UK, France, China and India.

“Electric vehicle markets around the world will not all move in the same direction or at the same speed in 2024,” the report says.

“Electric vehicle sales continue to rise globally, but some markets are seeing a significant slowdown.”

Figures from the Federal Chamber of Automotive Industries show that electric cars accounted for 8.1 percent of all new car sales in May, but sales rose by 26 percent instead of the 161 percent rise recorded in 2023.

Professor Dea says domestic and global sales trends suggest electric vehicles will continue to charge in Australia, but at a slower pace.

“In Australia, we continue to see increases,” he says.

“I think it will remain flat, which means we will not see the same exponential growth as we had last year.”

Some reductions in electric car prices in Australia

Tesla Model 3: Dropped from $4,000 to $54,900 (RWD model)

Tesla Model Y: Dropped from $5,000 to $55,900 (RWD model)

BYD Seal Premium: Now includes $58,798 government fee

BYD Atto 3 Standard: Down $3,512 to $44,499

Lotus Letter: Decreased $49,010 to $189,990

GWM Ora: Down $4,000 to $35,990 inclusive. Governmental fees

MG ZS EV: Down $2,000 to $39,990. Governmental fees

Renault Megane E-Tech: down $10,000 to $54,990 until June 30

Peugeot ePartner: Down from $10,000 to $49,990 through June 30. Governmental fees

See The Driven’s EV models page for details of all models available in Australia and their prices.

And see The Driven’s updated list of the nation’s best-selling vehicles, month after month, in 2024.


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