When will EVs become more accessible to the average consumer?
Electric vehicles (EVs) have long been hailed as the future of transportation, promising a cleaner, greener alternative to traditional internal combustion engine vehicles. Yet, one major hurdle remains: affordability. The question on many minds is, when will EVs become more accessible to the average consumer?
Electric cars offer a sustainable solution to transportation, addressing concerns about climate emissions and reducing dependence on fossil fuels, but until recently, they’ve been unaffordable for most people due to high upfront costs associated with battery technology and limited options in the market. However, with advancements in battery technology and increased competition among manufacturers, the cost of electric vehicles has been steadily decreasing. This decrease in cost has not only made electric cars more affordable but has also led to a surge in their availability. “Towards the end of 2023, we were offering around six electric cars per week for auction,” explains Brendon Green, General Manager, Motor Vehicles at Pickles. “But since the start of 2024, this number has surged to between 15 and 20 electric cars per week.”
Green further explains that used electric vehicle prices have softened and will continue to do so as more used cars enter the market. This significant increase in the availability of electric vehicles at auctions will also result in decreasing costs, reflecting both the growing demand for these eco-friendly alternatives and the expanding market supply.
Meeting growing demand
As consumer preferences shift towards sustainable transportation options, the motor vehicle industry is witnessing a significant surge in demand for electric vehicles. In response, manufacturers are accelerating production and expanding the variety of electric vehicles available to accommodate diverse preferences and budgets. At Pickles, we’re at the forefront of this movement, offering multiple used electric cars tailored to different price points and tastes,” explains Green. “We have a wide selection of electric vehicles ranging from $30,000 to $40,000, catering to those seeking affordability without compromising quality. For customers looking for a bit more luxury and features, we also have options in the $40,000 to $50,000 range. And for discerning buyers with larger budgets, we have premium electric vehicles priced at $60,000 and above.” Green further elaborates that 50 percent of the used EVs Pickles sell are purchased directly by mums and dads, as the majority are ex-government and ex-fleet cars boasting ample manufacturer warranty coverage.
The power surge
This surge in EV sales extends well beyond Pickles, with the industry witnessing a remarkable 120% increase in sales across Australia over the past year, according to the Electric Vehicle Council report, released in March 2024. Of the 180,000 EVs on Australian roads, 98,436 of these were bought last year according to the same report, underscoring the accelerating momentum toward electric vehicle adoption nationwide.
Green explains that the government's current incentives and subsidies aimed at promoting clean energy transportation have contributed to making EVs more accessible to a wider range of consumers.
As a result, the once prohibitive price barrier is gradually being overcome, paving the way for greater adoption of electric vehicles as a mainstream mode of transportation.
The bigger picture
In the past, Australia has trailed behind in providing government support for the electric vehicle sector. However, recent government incentives and subsidies have helped make EVs more accessible to a broader range of consumers.
The Australian Capital Territory stands out as the leader in the national EV market, with EVs representing over 20% of all new vehicle purchases. New South Wales saw a 9% increase in EV sales, followed by Queensland with an 8.3% growth rate, benefiting from its notably generous EV rebate scheme. Victoria also experienced an 8% growth in EV sales. Despite being relatively low, the Northern Territory experienced a threefold increase in EV sales in 2023.
Greater sales mean the previously daunting price barrier is gradually being overcome, paving the way for greater adoption of electric vehicles as a mainstream mode of transportation.
Brendon Green says that while the government’s proposed New Vehicle Efficiency Standards will indeed foster the growth and adoption of EVs, the most significant support has been for Australians who opt for Novated Leasing (salary sacrifice) of an EV. “In this arrangement, Fringe Benefits Tax (FBT) is not applied to EVs as it would be for Internal Combustion Engine (ICE) vehicles. A substantial proportion of new EV sales can be attributed to this segment of buyers,” he explains.
The road ahead
Although we are seeing a shift in policy, with an increase in government incentives and supportive policies, most experts agree more can be done. “I’d like to see the government provide an incentive for mums and dads to purchase used EVs, as is the case in some European countries,” Brendon says. “Many Australians want to transition to an electric vehicle, but can’t yet, due to the cost.”
Despite Australia’s slow start, there are signs of progress on the horizon. Major automakers are ramping up their efforts to electrify their vehicle fleets, introducing more affordable models with longer ranges, and as economies of scale kick in and production volumes increase, the cost of EVs is expected to continue declining.
In addition to technological advancements and market forces, consumer attitudes towards electric vehicles are also shifting. As awareness of climate change and environmental issues grows, more consumers are seeking out sustainable transportation options. The rise of ride-sharing services and the sharing economy has also contributed to increased interest in electric vehicles, particularly among urban dwellers looking for convenient and eco-friendly transportation solutions.
While it's difficult to pinpoint an exact timeline in terms of affordability for the masses, experts predict that significant progress will be made in the coming years. As battery technology continues to improve and production volumes increase, the cost of EVs is expected to reach parity with traditional vehicles within the next decade.
And while challenges remain, the future of electric vehicles in Australia appears promising. With concerted efforts from policymakers, industry stakeholders, and consumers alike, Australia can emerge as a leader in the global shift towards electrification and renewable energy.
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26 Mar