Cameron McIntyre, the CEO of carsales.com.au, told the Retail Panel – The Road Ahead at the recent AADA Convention in Sydney that recent research by his company showed a 14 percentage point drop in buyer intention around EVs.
Asked by the moderator of the panel, James Voortman, the CEO of the Australian Automotive Dealer Association (AADA) what he was seeing in terms of customer appetite for EVs, Mr McIntre said: “We have actually had a drop in the intention around EVs.”
Twelve months ago, he said, 56 per cent of people said they were interested in owning and EV
“Twelve months later, the same survey question: are you interested in an EV? Now it’s 42 per cent. So it’s actually come off a little bit.
(L-R): James Voortman, Geoffrey Pohanka, Stephen Lester, Matt Callachor, Cameron McIntyre and Nick Pappas
“But I think there are big issues emerging in and around the used car market valuation.
Mr McIntyre said Carsales as a business does regular cycles of consumer research around EVs and just completed a cycle a couple of weeks ago.
“First of all we reached out to about 1200 car buyers and we surveyed them and then we reached out to about 200 EV owners as well. And what the data say to us is that of those non-EV owners, about 42 per cent of them would consider buying an EV at some point in the future.
“The big issues that they tend to have are around price; about 65 per cent of people say price is their biggest barrier. And I guess in this last cycle, the one that surprised me was cost to maintain has gone up in the minds of the consumer as being a really big issue with EV’s.
“I think where that’s coming from is the used car market. EV’s are starting to emerge so what consumers are worried about is the cost of battery replacement. They’re starting to think about that when it comes to buying a potentially used EV and there’s not many on the market at the moment. So that was an interesting finding.
The CEO of Cox Automotive Australia and New Zealand, Stephen Lester, told the panel that the company, through its international auction arm, Manheim, is seeing significant drops in used electric vehicle values in response to government incentives and incentive by some manufacturers in the northern hemisphere.
Mr Lester was asked how important it is to develop a used market for EVs and what Manheim was seeing globally in terms of EVs holding their value.
Mr Lester said that “everybody would agree that right now we are just in this emerging used car market”. Local sales are at seven to eight per cent on a year-to-date basis”.
“We also have some pockets with Canberra at 20 per cent. If we look across the ditch, that number is dramatically higher at 40 per cent plus per cent now in New Zealand.
“And what’s really spurring all of that is really that acceptance is driving the behavior of consumers. It’s not necessarily just the desirability of the product, although that is very high it is that people are really engaging in what that driving experience looks like into the future.
“But what we are seeing from a Manheim perspective internationally over the last 12 months is that (resale values) are coming down.
“This (resale value decline) is really being spurred by government incentives as well as by manufacturers putting them on and the slide of Tesla (new car prices) is really telling.
“In Europe right now, with our business, we’re seeing EV values really come off at a rapid rate of knots, to be perfectly frank, because the reality is that as soon as we’re going to apply those discounts on the front end, we’re immediately going to see an equally receding value on used cars.
“So our data locally is a little bit tenuous (early days) from the fact that EVs are still sub-10 per cent of the market. So there’s probably additional volatility in that number, but that trend is definitely what we’re seeing elsewhere in other markets.
“But I really think, right now, what we are seeing by and large across the world, which is true still in the US as well, is that those (government) incentives are really playing havoc. And so our ability to work with governments to control that path and to plan how we’re going to incentivise the market will be critical to maintaining consistency in the used space.”
Mr Lester told delegates that one of the key aspects of used EVs was battery health.
“One of the things we have to really look out for in the future is battery health. And it’s something that we’ve invested in, as a business, Spiers New Technologies (SNT) in 2021 which is technology to look at how we can measure battery health as it relates to what that value of the car represents going forward.
“Probably some of us in our automotive careers got under the bonnet as we were looking with a fine tooth comb over every aspect of the engine, because we needed to understand what the wear and tear is in that vehicle.
“The reality is, there is going to be a market difference between a used vehicle in the EV space with a 90 per cent battery health score, and say one that has a 15 per cent battery health score with all the other variables applied to it. So that is something we have to look out for and really understand as we go forward,” Mr Lester said.
Stephen Lester
By John Mellor
