If you’re looking to buy a new car, then you should take a minute to consider if an electric car is right for you. There are a lot of advantages to electric cars, but the two biggest downsides in Australia are price and choice.
Regarding the choice of available models, often many new car buyers, simply aren’t even aware of the EVs available and thanks to the almost no servicing, we’re hearing plenty of reports that dealerships aren’t promoting them.
The latest episode of the popular Fully Charged Show, has a fantastic rundown of almost every electric car that’s been available in the last decade. Importantly they also take a look at some of the great EV options available in 2021 and vehicles that are on the way in coming years.
As you watch the video and see the volume of electric cars available internationally, it’s clear Australia is coming up short when it comes to entrants into the Aussie marketplace. If we were able to attract more automakers to sell electric vehicles into Australia, it would have multiple benefits.
Ultimately more models, across a number of vehicle categories and price points, will see more Australians find their way into an EV that’s right for their family.
With more choice, comes more adoption, helping reduce the emissions from our transport sector, helping us to meet our state and federal climate objectives.
As more electric vehicles enter the market, increased competition will create a downward pressure on price, but the variety of options has to be increased before that can take place.
To date, reductions in the price of electric vehicles has largely been a result of technology advancements, like the decrease in battery cost. With the addition of more models to our market, consumers will have multiple EVs to choose from, in the same market segment (like mid-sized SUVs) to help drive down costs as automakers battle it out for marketshare. This reduced price just benefits consumers and will again help increasing adoption.
It is estimated that the cost of bringing a new vehicle model to Australia, is around $1Million in certifications, approvals, safety tests etc. This means the return on investment can be a long one for an automaker, given the relatively low volume of sales to date.
Relative to many countries around the world, Australia has a relatively small new car market, with just 916,968 new vehicles sold in 2020. This means we’re likely going to need EV-friendly policies from the Government to encourage competition.
It matters not how much an automaker likes Australia, it’s often just a matter of economics, explains why many automakers like VW are not bringing great little EVs like the ID.3 to Austrlaia.
Here’s some rough maths to explain the value proposition in detail.
- New vehicle program cost est. $1,000,000.
- Retail price of an EV – $50,000
- Profit est – 10% = $5,000 (per vehicle).
This means the first 200 cars that are sold, go to simply paying back the price of entering the market, before the first returns are made on the model.
Australia is also famously lagging behind much of the world in EV adoption.
In August 2020, the Electric Vehicle Council produced a report on the state of electric vehicles in Australia. In that report, we find that just 0.6% of new vehicle sales in Australia during 2019 were electric.
In 2019, Australia seen just 6,718 electric cars sold, while the first half of 2020 was impacted by COVID-19, there was an additional 3,226 EVs sold.
10,000 EVs in a year and a half, for a country of 25 million people is a embarrassingly small and I really hope the Fully Charged video highlights that product availability and competition is a key issue that needs addressing.
SUVs was the largest vehicle segment in 2020, accounting for 49.6% of the market. If we take a moment to consider what the buyers of 454,701 SUVs could have selected from the EV lineup instead, we get a very short list.
While the Tesla Model 3 is the most popular EV in Australia, it’s big brother, the Model Y, importantly a mid-sized SUV, is yet to go on sale here. To make matters worse, the Model X refresh, means that large premium SUV is no longer available, with customers now having to wait till sometime in 2022.
Ford’s Mach-E looked like a nice competitor, with decent range at a decent price, but unfortunately was delayed. It is now looking like we won’t see it until at least 2022. The same story is true of Volkswagen’s ID.4, another example of an SUV that would likely do really well, if it was on-sale in Australia, but no release date is confirmed.