BYD SPEARHEADS CHINESE EV PUSH
BYD and other Chinese carmakers are bringing new electric vehicle (EV) models in droves to Australia, a market where they haven’t faced trade barriers and sales have surged due to EV subsidies and tax benefits as well as high petrol prices.
Since coming to power in 2022, Prime Minister Anthony Albanese’s government has aggressively promoted EV adoption as part of the country’s plans to cut down on emissions - a change that came after a decade of weak climate action under conservative leaders.
That’s created a powerful tailwind for electric car demand. EVs accounted for 7.2 per cent of Australian new car sales last year, up from 3.1 per cent a year earlier.
While Tesla, too, is greatly benefiting, it is the Chinese manufacturers in the non-premium end of the market that pose the biggest threat to incumbent carmakers like Toyota and Ford whose wide line-ups of petrol-engine cars mean they have more to lose.
Last year, sales for EV giant BYD, which entered the market in 2022, climbed nearly six times to more than 12,000 vehicles. The Warren Buffett-backed carmaker now has 14 per cent of Australia’s EV market, second to Tesla which has 53 per cent, data from the Federal Chamber of Automotive Industries shows.
“The opportunity is very clear,” said David Smitherman, chief executive at EVDirect, BYD’s distributor in Australia.
“We need to now get into the mainstream market because we’ve sold to the early adopters and the passionate EV purchasers.”
BYD would add two sport utility vehicles (SUVs) and a pickup truck to take its product line-up in Australia to six this year, Smitherman said.
EVDirect will also open 30 more dealerships in the next 18 months for total of a 55 and has embarked on fleet sales to companies like Uber.
Chinese state-owned SAIC Motor will launch three new models this year under its MG brand, including the MG3 plug-in hybrid and MG Cyberstar electric roadster, taking its EV/hybrid product line-up in Australia to five.
Incumbent carmakers are also looking to up their game. Ford has two EVs in the Australian market and another three on their way, according to a spokesperson.
Toyota has just launched its first electric car, which joins its nine hybrids in Australia in offering lower emissions than comparable petrol-engine vehicles.
It was confident in its strategy of providing a wide range of hybrids and steadily increasing battery electric cars, it said.
‘GIVING IT A GO’
Although Australia is a relatively small market on a global scale with 1.2 million cars sold last year, it’s highly attractive to Chinese carmakers given that it doesn’t have a car manufacturing industry and is seen as unlikely to introduce protectionist trade barriers.
Chinese startup Leapmotor, which has partnered with Stellantis to expand globally, has designated Australia as a priority market noting its lack of local car makers.
In key markets, tensions abound. European authorities have launched a probe into whether Chinese EV makers unfairly benefit from state subsidies, while the United States has launched an investigation into whether Chinesemade cars could be used to spy on Americans.
But relations between Canberra and Beijing have warmed after years of tensions, with both sides agreeing to turn the page and expand cooperation.
Albanese’s government has not given any sign it is worried about cybersecurity risks posed by Chinese cars.
Australia’s Foreign Affairs and Trade Department declined to comment on the matter.
To spur electric car demand, the government has introduced tax exemptions for EV car leasing/purchase agreements available to some consumers through their employers.
The country’s three most populous biggest states - home to Sydney, Melbourne and Brisbane - have also set goals for EVs to account for 50 per cent of all new car sales by 2030, giving generous rebates on EV purchases and investing heavily to build charging stations.
That was a major motivating factor for Mark Adamson, a 61-year-old TV director in the state of Queensland. He gained A$6,000 off the A$54,000 retail price of his extended range BYD Atto 3 SUV through state government rebates and then BYD offered a discount of roughly A$2,000.
“I figured why not give it a go? It’s sort of really worth doing and I have excess solar at home so I’ll mainly charge from at home, so it makes it a no-brainer in a lot of ways,” he said.
Indeed in Queensland, state government rebates alone mean that an Atto 3 can cost less than Toyota’s petrol-engine RAV4 crossover, a comparable model.
For Sydney union organiser Peter Alley, 63, who drives out once a week to see family who live 370km away, it was the need to cut down on petrol costs near record highs that persuaded him to switch from a 2008 Volkswagen diesel van to an Atto 3.
He now spends about A$20 per week on charging instead of A$130 a week on fuel.
Expectations are high that EV demand will continue to surge, although forecasts vary.
PwC estimates half of Australia’s new car sales will be EVs by 2027. BMI, a unit of Fitch Group, predicts 18 per cent by 2032.