More models, increased competition and excess stock have created an EV buyer’s market.
Unprecedented discounts have made electric cars more affordable than ever as carmakers scramble for market share.
And for those unable to splash out on a new electric vehicle, low prices are also creating bargains in the used car market.
More affordable than ever
Headlining the changes in the EV world are price drops across swathes of the market.
The GWM Ora hatchback is now Australia’s cheapest EV, priced from $35,990 after a fall in price of roughly $4,000.
The rival MG4 (from $39,990) is also thousands cheaper as part of a price repositioning on electric models from the budget-focused brand.
Peugeot recently discounted 2023 versions of its e-2008 by about $26,000 (a 40% cut), while Lotus slashed up to $49,000 off its Eletre SUV, which is now $189,990 before on-road costs.
Widespread deals and price adjustments have also been applied by Polestar, Audi and Renault.
The market leader Tesla – now a top 10 selling brand – also joined in the price cuts.
Early last year the entry-level version of the top-selling Model Y SUV was $69,300 and it’s now $55,900 after another price cut this week.
Despite years of inflation, Teslas are cheaper than they’ve ever been in Australia.
In response to the controversy around price cuts, the Tesla chief executive, Elon Musk, posted on X that “Tesla prices must change frequently in order to match production with demand”.
Mike Costello, corporate affairs manager at Cox Automotive, who provides vehicle data solutions and runs Manheim auctions, says “demand is just not quite as steep as it was at the peak of the market” in 2022 and 2023.
“Growth is up this year but it’s slowed,” he says. “The early adopters have embraced the technology but it’s proving to be a bit tricky to get the mass market to adopt EVs.”
Cutting prices is an easy way to spur demand, which Costello says is at the heart of the recent cuts.
“You’re not cutting prices if the market is healthy.”
More models coming
The big unknown is whether prices will drop further, as the imminent influx of new brands vying for some of the EV market looks set to supercharge competition.
Leapmotor, Lynk & Co, Zeekr, Xpeng and Geely are among more than 10 brands planning to join the 60-plus car brands already on sale in Australia.
That’s on top of companies such as BYD and Chery that have stated their ambitious growth plans. BYD, which only sells EVs and plug-in hybrids, has vowed to overtake Toyota to become Australia’s top-selling car brand by 2028.
Ross Booth, the general manager of valuations giant Redbook, believes there’s only one way to achieve that monumental feat: offer better value.
“You have to differentiate yourself and build a brand by building good product at the right price that the market wants,” he says.
“The Australian market has always been led by value for money.”
Australia a prime target
The Australian market has long been a popular training ground with new brands.
And the appeal of a mid-sized developed market could be ramping up.
Costello believes our lack of vehicle manufacturing makes Australia a prime target for Chinese brands facing tougher trade barriers in the US and Europe.
“Open markets like Australia that don’t have a domestic manufacturing industry to protect are going to become very desirable places for these fast-growing Chinese brands,” he says.
The Chinese influx is also indicative of the pressure on existing brands.
Costello believes there will be casualties.
“A market of 1.2m cars can’t have 80 different brands. Not every manufacturer we know today is going to make it.”
Hitting emissions goals
Carmakers have an added incentive to sell more EVs: mandated CO2 targets that stipulate a 60% reduction in new vehicle emissions by the end of the decade.
The government’s new vehicle efficiency (NVES) standard passed parliament this month and comes into effect in 2025, forcing carmakers to reduce how much carbon dioxide their vehicles emit.
Hybrids will play a key role, but zero emissions vehicles such as EVs will be required as the NVES requirements ramp up towards the end of the decade.
And EVs are the perfect way to offset potential penalties for thirstier vehicles that breach the CO2 caps.
A market abuzz
Throw everything into the mix and experts agree the recent activity in the EV market has made it a great time to buy.
“There’s never been a better time to embrace the technology,” Costello says. “The ball is definitely in the buyer’s court right now. There’s plenty of supply of most vehicles, prices have come down quite significantly, there’s a lot more choice in the market.”
The question is whether EV prices will get even sharper in the near future. With the influx of competition and smaller, more affordable models planned, that appears almost certain.
But other market forces – including exchange rates – could also have negative impacts.
Still, for those prepared to consider secondhand cars, the choice in sharply priced EVs flows to the used market too.
Used car darlings
The pace of change in the EV market, dropping new car prices, government incentives and hesitation about new technology has seen the price of used EVs drop.
Most EV buyers want to buy new rather than make compromises on a used car.
“We still don’t have that demand for used EVs,” Booth says.
He says hybrids are now the darlings of the used car market, while demand for electric cars is soft, with one exception: Tesla.
“People still want a Tesla,” says Booth. “Tesla is still class-leading EV residual values because of the demand in the used market.”
Elsewhere, though, Booth says the used EV market is now a good place to shop.
“If you can get an EV that does the range and the charge times that suits your market and suits your price then there’s a lot of bargains.”
Toby Hagon is a motoring journalist and the editor of EV Central
