Motorists remain cool on EVs

NEW-CAR buyers remain cool on EVs with the latest research by the Australian Automotive Dealer Association (AADA) showing concerns about affordability given the state of the economy, high vehicle prices and resale values; all of which has stagnated buyer interest.

The AADA’s ‘EV & Hybrid Vehicle Wave 3 Insights Report’ shows EV sentiment has remained largely stagnant over the past year, with 39 per cent of respondents open to the possibility of an EV purchase. EV sales now represent only 4.4 per cent of total vehicle sales, falling to the lowest level since October 2022.

In light of the report, the AADA has called for balanced franchising protections for new-car dealers so that they can continue to invest in the automotive transition whilst the market adapts to consumer trends. 

The AADA said this “must be a first order priority for both major parties.”In the report, the AADA said that dealers “were particularly worried that the new emissions standards could leave them stranded with electric vehicles that drivers did not want because the policy measured imports rather than the number of cars sold.”

The research is the third wave of tracking EV sentiments across the community, following similar studies conducted in September 2022 and January 2024. Feedback was collected from a sample of 2000 Australian drivers, representative by age, gender and household location across Australia.AADA CEO James Voortman said: “Intention to purchase an EV has plateaued with 39 per cent of respondents saying they would consider an EV for their next vehicle – largely unchanged from two years ago.”

“Affordability remains the biggest barrier to EV adoption, with 55 per cent of respondents stating that EVs are simply too expensive, however, this has improved from 62 per cent in the first survey in September 2022.

”Mr Voortman said that economic pressures were clearly influencing buyer behaviour, with 64 per cent of respondents saying they are less willing to pay a premium for an EV due to current cost-of-living challenges. 

“The average price premium consumers are willing to pay for an EV has dropped to just 6 per cent, down from 8 per cent in January 2024,” he said.

“The research shows that respondents are more likely to consider traditional hybrids (52 per cent) than EVs (39 per cent) or plug-in hybrids (36 per cent), a finding which is backed up by current new car sales data.”

The price barrier was despite EV makers cutting prices of new electric cars. The cheapest EV in Australia is now the BYD Dolphin at $29,990 plus costs ($32,138 drive away in Victoria).

This was followed by the GWM Ora ($33,990 drive away), MG4 ($34,990 d/a), and Nissan Leaf ($34,990 d/a). Only 12 months ago, the Leaf was $50,990 (plus costs).

Other key findings from the AADA report include:

• While 58 per cent of respondents consider EVs are better for the environment, this has fallen from 67 per cent since early 2024.
• Concerns over EV resale value and repair costs have increased since early 2024, adding to the hesitancy around adoption.
• The trend towards purchasing medium SUVs continues, with 32 per cent of respondents considering this body type for their next vehicle.
• Higher-income households are nearly twice as likely to consider purchasing an EV compared to those on lower incomes.
• Rural households remain significantly less inclined to purchase an EV compared to metro-based households.
• Over the last 10 months support for governments incentivising EVs has reduced from 69 per cent to 62 per cent.
• Support for a fuel efficiency standard is overwhelming, with 78 per cent of respondents supporting the policy.

“These findings underscore the importance of ensuring that policies aimed at boosting EV uptake consider affordability and infrastructure accessibility,” Mr Voortman said.“With the recently introduced New Vehicle Efficiency Standard (NVES) now in effect, it is crucial that the framework supports consumer choice without compromising vehicle affordability.

“If EV adoption is to accelerate, industry and government must work together to address cost concerns and improve the value proposition for consumers.”