‘Market reality’ hits electric cars as prices crash

After an initial rush by ‘early adopters’, sales of electric cars are slowing - and a new wave of Chinese rivals are ready to pounce. See the list of discounted new models.

Electric car prices are plummeting in response to slowing sales while car makers brace for a tide of Chinese models from the likes of XPeng, Leapmotor and Zeekr.

Bolstered by the success of relatively new names in Great Wall Motors, Build Your Dreams and MG, the fresh brands are set to bring new metal to Australia that will challenge the establishment.

Zeekr is set to enter the Australian car market this year.

Prices for popular electric cars such as the Tesla Model Y have already fallen by more than $12,000 in the last two years, while luxury models from Mercedes, BMW and Audi have dropped by up to $100,000.

Having over-estimated demand for its electric compact SUV, Peugeot slashed more than $20,000 from the price of the electric Peugeot e-2008 to clear stock ahead of the new financial year, reducing the price to $39,990 drive-away.

Vehicle price website 'The Beep' recorded a $12,000 drop in Tesla prices.

Polestar has cut up to $15,000 from its electric sedan, while Renault slashed $10,000 from the price of its Megane E-Tech to clear excess stock.

Fierce competition at the bottom of the market pushed Great Wall Motors to cut about $9000 from the price of its Ora hatchback, now available for $35,990 drive-away.

Those changes are dwarfed by luxury models including the $49,000 trimmed from the Lotus Eletre premium SUV, or the $100,000-plus slashed from the asking price of Mercedes-AMG’s EQS 53.

Lotus took nearly $50,000 off the asking price of the Eletre before customers received cars.

After working for Mercedes for 15 years, Robert Leigh co-founded The Beep, a website hat tracks automotive prices in Australia.

“We’re constantly monitoring the manufacturers,” he said.

“You can go on our website and see the price history of where cars have dropped, when and by how much.”

Mr Leigh said electric car prices were volatile as “the cars are getting huge upgrades every year”.

'The Beep' founders Robert Leigh and Shane Riley.

“That is creating hesitancy in the marketplace,” he said.

“The new ones coming through are so much more impressive … and that realisation is setting in with consumers. They know that if they wait a little bit the tech is going to get better.

“When a battery update can mean hundreds of kilometres more range … you don’t want to be left with old technology.

“Smartphone upgrades year on year used to be massive, now they are not a big deal.

“We need to get to that point with EVs, but we are not there yet.”

Significant price changes represent bad news for people who already splashed out on a premium EV, as resale values for used cars are affected by volatility in the new vehicle market.

Though more Australians have bought electric cars in the first quarter of 2024 than in any previous year, the rate of growth for battery-powered vehicles has slowed.

Peugeot slashed more than $20,000 from the price of its e-2008.

Damien Meredith, chief executive of Kia Australia, said it is because “the early adopters have got their cars”.

“It’s not jumping at the rate that we’ve seen previously,” he said.

“I think there’s possibly the early adopters have done all they can and now we are looking at the market reality of what is occurring, the costs, etc.

“There are a whole lot of variables now that are catching up with EV sales.”

The volatility makes life interesting for Kia, which is about to introduce a new electric SUV in the Kia EV5.

A volatile market has discouraged Kia from setting concrete prices for the EV5.

The manufacturer has not confirmed prices for the upcoming model.

The same can be said for Volkswagen and its long-awaited electric cars that will enter an intensely competitive market in the second half of the year.

The Federal Chamber of Automotive Industries reports that Australians bought 31,662 electric cars in the first quarter of 2024, which is more than the 23,926 delivered in the same period last year.

But this is the first year that electric car sales have not at least doubled compared to the same period in the previous year.

The April market share for electric vehicles fell from 7.9 per cent in 2023 to 6.4 per cent in 2024, while hybrid sales climbed from 7.5 to 18.3 per cent.

Mr Meredith said the EV market will rebound with the addition of new brands from China.

The success of BYD, GWM and MG has pushed new brands such as XPeng, Leapmotor and Zeekr to enter the market.

Kia Australia chief executive Damien Meredith.

“There are about six that we know of … We think there will probably be a dozen from China in the next 12 months,” Mr Meredith said.

“I still have confidence in EV sales.”

Originally published as ‘Market reality’ hits electric cars as prices crash