Kia slashes EV5 sales targets
An Aussie car industry boss says manufacturers must ‘be realistic’ about the nation’s appetite for electric cars.
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Kia has slashed its sales forecast for the just-launched EV5 electric car amid cooling demand for electric cars and an intense ramp-up in competition.
Speaking at the launch of the crucial mid-sized SUV that has the Tesla Model Y in its crosshairs, Kia Australia chief executive Damien Meredith admitted once-ambitious plans to sell 10,000 EV5s a year had been halved to fewer than 5000.
He says it’s all about being realistic as many buyers remain wary of electric vehicles and the infrastructure that is crucial to keeping them running.
“We’ve got to be realistic with the market,” said Meredith of the dramatic slowing in growth of EV sales – and the general tightening of the new-car market.
“We’ve got to set our sights on selling 400 (EV5s) a month. That’s going to be a challenge within itself.”
While mid-sized electric SUVs from Toyota, Ford, Subaru and Hyundai have hefty price tags on them, the EV5 sells from $56,770 drive-away.
That makes it cheaper than the Tesla Model Y that is the top selling EV in the country – and one of the most popular SUVs on the market.
It also undercuts rivals such as the Toyota bZ4X, Subaru Solterra and Ford Mustang Mach-E, each of which is selling in tiny numbers.
It also positions the EV5 nicely against soon-to-arrive rivals including the Volkswagen ID. 4 and BYD Sealion 7, as well as plethora of new arrivals such as the Deepal S07, Zeekr X and Xpeng G6.
Tesla has demonstrated in the past it doesn’t mind dropping prices to meet the market, something that can infuriate existing owners due to the corresponding drop in the value of used vehicles.
But Meredith says Kia will not be playing that game, all in the name of giving buyers confidence.
“We won’t respond (to potential Tesla price cuts) because we believe that it’s really really important to protect the residual value of where you start,” he said.
“It’s priced well … we’re really happy with it.”
That’s particularly important for leasing companies that estimate how much a car will be worth at the end of a lease, at which point they can be forced to take the car back if the driver doesn’t want to make the final payment to buy it.
And Meredith says leases will be a huge component of EV5 sales
“Companies and governments are still driving EV purchases,” he said, saying that Kia believes 60 per cent of EV5 sales will be to fleets.
It helps that those taking out a novated lease can leverage the fringe benefits tax exemption on EVs priced below the luxury car tax threshold, currently $91,387.
By financing the car from pre-tax income it saves thousands of dollars each year – and makes EVs much more affordable than equivalent petrol cars.
Originally published as Kia slashes EV5 sales targets
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