Discounts on EVs as competition heats up

Now is a great time to buy a new electric vehicle, as makers discount last year’s stock and competition heats up across the market.

Electric car discounts have reached new levels as car makers jostle for share in the hotly contested market.

But the news may not be great for those who have recently bought an EV, as the discounts will take their toll on used car values.

Less than a year after it was launched, the MG4 has been discounted by roughly $4000.

The range now starts at $39,990 drive-away, making it one of the cheapest EVs on the market.

It’s currently undercut by the GWM Ora, which has drive-away deals of close to $38,000 as part of an offer that wraps up at the end of the month.

Fledgling Chinese brand BYD also has a $2023 cash back offer on 2023-build versions of its Atto 3 electric SUV, the third best-selling EV on the market behind the Tesla Model Y and Tesla Model 3.

MG has slashed the price of its MG4 hatchback. Picture: Thomas Wielecki.

Those discounts are great news for those in the market for an EV, according to Ross Booth, the general manager of valuations giant Redbook.com.au.

“There’s more models coming into Australia,” says Booth, estimating that there will be 90 new EVs to choose from by the end of the year, up from 59 in 2023.

“With more cars coming in there’s more choice. More choice drives more competition. That’s great for consumers.”

He points to the circa-$8000 price drops on the recently-arrived Ford Mustang Mach-E and Subaru Solterra, each of which was discounted before any customers had taken delivery.

“That’s telling you the market has fundamentally changed,” he says, adding that the number crunchers in car makers had clearly realised something needed to change to hit their planned sales targets.

BYD is clearing old stock at discounted prices. Picture: Supplied.

“To sell the volumes you want to sell you can’t do it at the previous price point.”

EV brand Polestar – effectively an offshoot of Volvo – has also sharpened the pencil.

Until the end of April the company is offering up to $10,000 off the Polestar 2, which sells for about $68,000.

And market leader Tesla – which accounts for more than half of all EV sales – is also crunching deals on some models.

Last year’s version of the Model 3 Long Range sedan – which underwent a significant update late in 2023 – has circa-$9000 discounts to clear old stock.

Part of the discounting is the new-car market returning to vague normality, according to Booth.

Price adjustments help to shift old stock, which is increasingly important as EV competition heats up and price premiums compared with petrol and diesel vehicles continue to work against many EVs.

Polestar has deep discounts on the Polestar 2. Picture: Supplied.

But Booth says the fast-moving pace of technology in the EV market and generous government incentives – including a fringe benefits tax exemption – have made new EVs more appealing at the expense of second-hand models.

“People want new EVs, they don’t want used EVs,” he says.

“All the government incentives lead you to buying new, not used.”

However, Booth singles Tesla out as an exemption to the rule.

“Tesla has historically behaved differently to the market from a used vehicle perspective to other EVs,” he says.

“The reason is demand. The demand for Tesla has been stronger both new and used, which has held up the used market stronger than other EVs.”

There is a silver lining for those considering a switch to electric: it’s a good time to shop a used model.