Market Reports, News

AUSTRALIANS have shown a waning interest in EVs, driven by the tightening economic conditions, charging issues and the comparative high price of new EVs and, according to the latest research from Carsales, future interest in owning petrol cars is rising.

Carsales, which operates the largest online car marketplace in Australia, said in its research report that the findings underscore the complex interplay of financial, infrastructural, and informational barriers that continue to hinder the adoption of EVs in Australia. 

“While price remains a predominant concern, the importance of effective communication about government subsidies and improving charging infrastructure cannot be overstated,” the report said.

Given the massive amounts of capital being expended on EV infrastructure the report has serious implications for OEMs, dealers and governments.

Carsales said that one of the most notable trends from the research is the continued decline in lifetime EV consideration. 

As of May 2024, only 34 per cent of respondents considered purchasing an EV, a significant drop from 56 per cent in June 2022. The results were also foreshadowed in Carsales previous research on EVs released in January.

“This decline can be largely attributed to financial pressures such as the increasing cost of living and rising interest rates, which have impacted consumer confidence,” researchers said.

“The price of EVs remains the most significant barrier, cited by 59 per cent of respondents. 

“Additionally, 64 per cent of buyers reported having to adjust their car budget due to these economic factors, further pricing out many potential EV buyers.” 

But it’s not solely financial concerns slowing buyer action.

Carsales found that “the perceived lack of charging infrastructure and the time required to charge an EV are also significant deterrents with half of all respondents indicating charge time as their main deterrent (up from 42 per cent in November 2022).

“While cost of living and EV prices remain high, yet stable, the growing concern over charging time highlights the need for better education around infrastructure to support EV adoption.” 

Carsales found that respondents nominate petrol vehicles as their preferred choice, over diesel, hybrids and EVs.

“This marks a substantial shift from June 2022, when EVs were leading future intentions,” researchers said.

“Interestingly, despite being seen as environmentally conscious, Gen Z is the least likely to foresee themselves driving an EV by 2035 (12 per cent), and show a stronger affinity towards internal combustion engine (ICE) vehicles (58 per cent).

“This highlights that the environmental benefits of EVs are not enough to overcome the perceived financial barriers for this generation.” 

The research said that despite these challenges, some EV brands were making headway. Leading the charge is BYD which has become known for its competitive pricing and large sales network through Australia’s biggest vehicle retailer, Eagers Automotive.

Carsales said that BYD has seen a dramatic rise in popularity and is now the second most well-known EV brand in Australia, after Tesla. 

“This suggests that affordability can significantly enhance brand recognition and consideration among consumers,” the report said.

On the subject of cost, the research said that government subsidies also play a critical role in influencing EV purchases, yet awareness of them remains low. 

“Less than 20 per cent of car buyers are aware of the specific details of these subsidies,” it said.

“The effectiveness of these incentives is contingent on overcoming current barriers such as the availability of charging stations and battery longevity. 

“Interestingly, considerers are more likely to be influenced by subsidies than non-considerers, underscoring the need for better communication and education about these incentives.”

The latest research follows a Carsales survey released in January that said the Australian EV market demonstrated strong potential, as marked by its record-breaking sales figures in 2023. 

But this earlier EV survey showed the trend that has now been realised.

In January, it said that “shifting economic priorities as well as lingering concerns over charging infrastructure, are currently tempering enthusiasm for EV ownership.”

“Despite increased awareness, only 38 per cent of respondents considered purchasing an EV, a decline from a previous high of 56 per cent in June 2022,” the research said.

“Intriguingly, this evolving picture underscores a potential resurgence in the dominance of conventional petrol vehicles, with survey participants indicating they were far more likely to be driving traditional petrol-powered cars by 2030 than EVs.” 

In the January survey, participants were far more likely to predict they would be driving a traditional petrol-powered vehicle by 2030.

“While this highlights current anxieties, it does not preclude a significant transformation as EV technology matures and becomes more accessible,” the research then said. 

Asked in the January survey if a used EV was a consideration, only half of survey respondents expressed interest. 

Carsales said then that “this highlights that while many recognize the potential benefits of electric vehicles, they harbour some hesitation towards entering the pre-owned segment.”

“Factors like uncertainty surrounding battery life expectancy and a desire for the latest technology features could fuel this limited appeal,” Carsales said.

By Neil Dowling

AdTorque Edge