Mixed Manufacturer Responses to State EV Subsidies in Australia

As Australian states introduce measures to encourage the uptake of electric vehicles, manufacturers are giving mixed responses. Basically, the cheaper cars are getting more expensive and the expensive cars are getting cheaper. Bit of an odd situation methinks.

The highest selling EV in Australia is the Tesla Model 3 SR+. Two years ago, I paid $72,000 for a red one — including all on-road costs. Now, you can buy one for $60,000 (plus on-road costs, minus a subsidy of $3000 in two states so far) — and the car now goes faster and further. That’s a $14,000 difference in 2 years. Some people are not impressed by this.

New buyers are excited, though, as 1200 Model 3s have just arrived and will be delivered as soon as the subsidy kicks in.

On the other hand, the second highest selling EV in Australia is the SAIC-produced MG ZS EV — an electrified version of a petrol car. It has gone up in price. It’s a good value for the money I thought when I took one for a test drive last year. An increase of $1000 has raised the price of the cheapest EV available in Australia to just under $45,000.

The Hyundai Ioniq (another EV built on an ICE platform) has also gone up $1000. Purchase price plus on-road costs bring the price to around $50,000. Again, it is a solid car with reasonable range.

The issue that bothers me is that if this trend continues, no one will buy them. I know I am biased, but they just can’t compare with the future-proofed technology, superior power, and range of a Tesla — for not much more in cost. The main selling point (apart from nostalgia for the lost days of British motoring in the case of the MG, or brand loyalty in the case of Hyundai) for one of these other models was the significant price difference. Now that the Model 3’s price has dropped considerably while the other models’ prices have increased and that price difference has diminished, it will be interesting to see how the changes affect demand. 

On a further note, Hyundai is bringing an EV designed from the ground up to Australia — the Ioniq 5. They have been spotted in the wild testing here. I’m not sure what the price point will be, but it is obvious that the market is slowly getting competitive. The more, the merrier.