EV sales charge ahead during coronavirus downturn

Moving Well | Tim Nicholson | Posted on 31 July 2020

Electric vehicles buck sales slump as Aussies embrace low-emission vehicles.

As new car sales slumped in the first half of 2020, hit hard by COVID-19 and economic uncertainty, electric vehicles have bucked the trend, signalling a shift to wider acceptance of low-emission vehicles in Australia.

Sales of battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) leapt 19.2 per cent in the six months to 30 June, compared with the first half of 2019. Among private car owners, rather than fleet or corporate buyers, the growth has been even stronger, with a 116 per cent year-on-year increase in sales. 

At the same time overall new vehicle sales – already in the doldrums after more than two years in decline – plunged 20.2 per cent, largely due to shocking sales results in April and May. 

Tesla driving down coastal highway

Three in five Victorians would consider buying an electric vehicle (EV) for their next car.


True, electric vehicles still account for a small slice of the Australian market. The 1526 EVs sold in the first half of the year accounted for just 0.35 per cent of total vehicle sales, but the inroads have been significant since 2015 when EVs accounted for just 0.09 per cent of all new cars sold. And the official figures understate the growth, as the country’s most popular EV brand, Tesla, does not report sales data to the Federal Chamber of Automotive Industries (FCAI). It is believed the American manufacturer sold just below 3000 units in 2019 – more than Peugeot, Fiat and Jaguar. Tesla’s Model 3 was the top-selling EV in Australia last year.

So, what’s behind the EV surge?

According to Electric Vehicle Council CEO Behyad Jafari, the growing number of models available on the market, increasing general interest in EVs and a more sophisticated understanding, especially concerning some common EV myths, have all played a part.

EVs are becoming more accessible

“We’ve got more models available to customers that suit different needs,” says Behyad. “We see that right around the world; as you’ve got more variety to choose from, more people are able to purchase something that suits them.” 

He cites recent research, conducted in partnership with RACV, which suggests that more than half of all car owners would consider buying an EV if they could find a model that suited their needs. “Then that number skyrockets when people spend time researching electric vehicles.”

People are becoming more informed

He says as people learn more about charging times and infrastructure, as well as performance capabilities of EVs, they start to see them as a viable alternative to a petrol or diesel car.

“So with that demystification, and the message getting out there about electric vehicles, more people want to buy them. We've seen this right around the world and we've been seeing it for a few years, that vehicle sales keep falling, but electric vehicle sales keep rising.”

Early adopters have embraced the new tech

Several manufacturers that sell EVs in Australia have reported an uptick in sales in the past year. Mercedes-Benz sold out its allocation of the EQC electric SUV when it launched late last year, but has managed to secure more stock for keen buyers. The company says there has also been a surge in interest in its plug-in hybrid C-Class and GLC this year.

Mini’s all-new Cooper SE electric hatch has already sold out for 2020. Potential buyers will have to wait until next year to get their hands on one. Meanwhile Hyundai reports that sales of its Ioniq and Kona electric models are up 22 per cent and 31 per cent respectively year-on-year.

EV pioneer Nissan says sales of its Leaf have soared 826 per cent so far this year, albeit off a low base and following last year’s introduction of the second-generation model. The Leaf is currently the only EV on the Australian market with vehicle-to-grid (V2G) charging technology, which allows people to draw electricity from the car’s battery to supply energy to the home.

We’ve seen this right around the world and we’ve been seeing it for a few years, that vehicle sales keep falling, but electric vehicle sales keep rising.
Renault Zoe parked in driveway
Hyundai Kona driving down country highway.

Renault Zoe and Hyundai Kona were two of the early EVs to hit the Aussie car market.



People want to reduce their environmental footprint

Nissan Australia managing director Stephen Lester says changing economic conditions and an increasing desire among consumers to reduce their carbon footprint have helped spur Leaf sales. And, he says, once people drive an EV, they start to see the benefits.

“I think that, overwhelmingly, people do want to see change and once they get behind the wheel of the Leaf or an electric car in general, they realise how fun they are to drive,” says Stephen. “And when you combine that with technology like V2G, you can really start to see how your energy consumption can change for the better.”

They’re fun to drive

Stephen says many people’s perceptions of what an electric car is like to own and drive differ from the reality. “And when they get behind the wheel and step on the throttle, they go, ‘Whoa, it hasn't even made a noise yet and I'm already doing 60, 70 kilometres per hour’. And then you just start to drive it and live with it for a little while and you realise, ‘Hey, I'm not queuing up at the petrol station. I just simply plug it in and off I go. I never think twice about it.’ (More: What it's really like to drive a Tesla.)

He says running an EV is easier than many people think. “People still don't realise that you can just plug it into your regular outlet at home. You don't need any other infrastructure built into your house. If that’s how you use your vehicle 365 days a year, you’d never have to really think twice about it.”

Our electric future


 
The EV Council expects about 50 per cent of new-vehicle sales in Australia to be EVs by 2030. It sounds like an ambitious target, considering roughly one million new vehicles are sold in Australia annually. However, most global automotive manufacturers are investing billions of dollars into electrified powertrain technology, largely prompted by aggressive CO2 emissions targets set by the European Union. Some countries in Europe, including Norway, the Netherlands, France and Denmark, as well as the UK, have even announced plans to ban internal combustion engine vehicles in the coming decades. 

Given that Australia no longer manufactures vehicles and relies solely on imports, these international developments are likely to mean big changes for the model line-up here. New-car showrooms will look very different in five to 10 years as more electrified variants roll out from global manufacturers.

Already there are new models rolling onto our shores, with the highly anticipated Porsche Taycan, Audi’s e-tron, and MG’s more affordable ZS electric SUV due to arrive later this year.

Porsche Taycan Turbo S plugged into the charger
Porsche Taycan Turbo S plugged into the charger.

Luxury car brands such as Porsche have also entered the EV market.


The price barrier

As more models land, their relatively high prices remain a barrier for many buyers, and there are calls for better government incentives to encourage uptake. In July, however, the government announced a lift in the threshold for the luxury car tax for fuel-efficient vehicles from $75,526 to $77,565, which will mean EVs priced under the new threshold will be exempt from the 33 per cent tax. Additionally, some states and territories – Victoria, NSW, Queensland and the ACT – already offer discounts on registration fees for electric vehicles. (Plus: The real costs of owning and running an electric vehicle.)

...and hybrids are booming, too.

Australians are also finally starting to warm to petrol-electric hybrid vehicles, which use an electric motor and battery, but also have a petrol engine. For those not ready to make the leap to an EV, a hybrid offers lower fuel use and fewer CO2 emissions than a regular petrol or diesel car, without the premium price usually associated with fully electric cars. So far this year, Aussies have snapped up 23,232 hybrid vehicles, 87 per cent more than for the first six months of 2019. This growth has been boosted by the launch of the hugely popular Toyota RAV4 hybrid, and other newcomers including the Subaru Forester hybrid, but it also signals that Australians are beginning to see the benefits of electrified vehicles.