FRICTION in the Middle East and the resulting surge in oil prices has triggered a surge in  demand in EVs in Australia with major EV makers reporting huge increases in floor traffic and a huge jump from buyer disinterest in EVs.

BYD has reported showroom traffic has grown 50 per cent in the past week, while a Kia spokesperson said its dealers were reporting strong demand across all EV models, especially the EV3 and EV5 SUV models that are priced for the family buyers.

In addition, the used EV market has received a jolt.“Dealers and private buyers have certainly been more receptive to our used EV stock lately,” said Cox Automotive Australia corporate affairs manager Mike Costello, citing data from Manheim auctions. 

“It certainly feels like people who may have been sitting on the fence about EVs are now showing serious interest in buying them. 

“That’s great for our vendors now, and also augurs well for resale values which impacts positively for fleet customers and buyers.”

The conflict in the Middle East and the resulting fuel price rises has focused buyer interest on EVs – and other electrified vehicles including hybrids and PHEVs – but the industry is cautious about how long this will last.

“The petrol price rise definitely has put EVs front and centre in car-buyers’ minds and that may take a long time, if ever, to change,” Mr Costello said.

“Perhaps the cat is firmly out of the bag. And if we see this market mature via uptake, that should stabilise residual values in the longer term.”

Mr Costello said interest in EVs was also being felt immediately in the auction sales at Cox subsidiary Manheim, which had already seen EV volume offered and sold rising significantly over the past 18 months as fleet turnover escalates. 

Cox Automotive Australia corporate affairs manager Mike Costello

Cox Automotive Australia corporate affairs manager Mike Costello

“Dealers who were understandably wary of used EVs as a purchase are now more actively bidding,” he said.

“It’s simple supply and demand really. Customers feeling the pinch are exploring their options and savvy retailers are striking while the iron is hot.” 

He said that since the start of last week, all but one of the used EVs on offer at Manheim Australia public auction has found a buyer, with sold vehicles going for on average 15 per cent above reserve and 17 per cent above valuation.

“These are comfortably ahead of the mean, showing how rapidly buyers can move,” Mr Costello said.

“Also since the start of last week, the average selling price of low-cost and late-model wholesale EVs has increased significantly over the YTD average: By up to 30 per cent on Hyundai Ioniq and MG ZS models.”

He said for example the early model Hyundais were once not so popular with private and dealer buyers but were now being actively sought after as affordable second vehicles, with “much greater interest in the past few weeks” according to the company’s on-the-ground auctioneers. 

But he said that the used EV prices were coming up against the “many ultra-affordable Chinese EVs pumping into the new market” so he envisaged an impending ceiling on some models’ residual values.“Overall sales volume of EVs in the Manheim auction lanes have about tripled over Q1 versus the same period last year,” he said.

He attributed this to increased market awareness of EVs and the availability of Aviloo battery health tests as key factors further helping strengthen the market beyond just the rising petrol costs.

“We sell EVs on behalf of OEMs, leasing firms, government agencies such as QFleet and more, and it’s interesting to observe that despite the sharp uptick in sales, we are still selling these vehicles for a few percent above the sellers’ own reserves on average. It’s a good sign”.