I’m not happy! The value of my eight month old electric Cupra Born has undoubtedly gone backwards faster than I’d like despite its low kays and immaculate condition. Now, fortunately, I’m in no hurry to sell it and don’t plan to for some time to come.
But… with special offers on so much of the brand new electric vehicle stock on the Australian market today, EV used values are inevitably taking a hit. And even the excellent Born is being openly offered with an effective $3000 discount by virtue of throwing in options free of charge. That’s dwarfed by other offers and price cuts that are out there masquerading as end-of-financial-year deals.
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Even the bigger volume EVs are being offered with very substantial discounts, such as $15,000 off a Polestar 2. That’s akin to a 25 per cent discount which, by any measure, is huge, and very publicly available, unlike some offers which might be more clandestine – for instance, by offering a potential customer a highly inflated trade in figure on a part exchange.
BYD are also weighing in with special offers on ‘demonstrators’ to shift stock albeit not as aggressively as some brands.
Meanwhile, sales of the Peugeot e-2008 have been, presumably, so slow that they felt the need to offer a 33 per cent discount ($20k) to shift existing stock. At $39,990 drive-away, that’s massively cheaper than the same car is anywhere in Europe.
Even Tesla, with an almost 50 per cent share of the Australian EV market year to date, aren’t immune from this price slashing. Twice within the last few weeks, the market leader has seen the need to knock back retail prices by up to $8500. And this includes the newly refreshed Model 3 as well.
The huge success of the Ford Ranger is in stark contrast to the total market apathy shown towards the Mustang Mach-E, where miniscule sales in comparison with the Tesla Model Y, for instance, led to the slashing of the retail price at the end of last year by $7000.
Less publicly, some of the prestige brands are offering enormous discounts on existing EV stock, some of which has been sitting on grass here for many months whilst, and indeed very publicly, Lotus has cut almost $50,000 off the previously announced price of the new Eletre SUV before it’s even landed here!
All of this is going to have a huge impact on used EV values in the months to come. Moreover, it’s also going to knock the confidence of prospective buyers of both new and used electric vehicles. Who wants to hear that their neighbour has paid 20 per cent (or whatever) less for the same car? And then find out that the overnight reduction in used values means that they’ve now got negative equity in their car.
Quite simply, the EV marketplace has, within the space of six months, become chaotic and without real foundations underpinning it.
It’s not that there aren’t buyers for EVs. There are people out there who want them. I’m one of them. But the market isn’t growing at anywhere near the rate that the manufacturers were anticipating. They have shipped product here in hopelessly optimistic numbers.
It hasn’t been helped by some of the products being less than stellar, to say the least. For instance, none of the Peugeot and Renault EV offerings stack up so far here in terms of their (pre-offer) pricing, range, etc. Neither brand is exactly knocking it out of the park with their conventional cars, so why burden the dealers with models that, predictably, aren’t market leaders and therefore were very unlikely to sell?
On the other hand, one thing that I’m absolutely sure you won’t be able to criticize about the forthcoming Porsche Macan EV is its abilities. By all reports, it’s an excellent car with a more than adequate range. However, and it’s a big however, with added burden of the entry price going up from $95k for the outgoing ICE Macan to $134k for the EV version, is it going to sell in anything like the numbers of the existing model? Far and away the biggest seller here in the Porsche range, the Macan sold almost 3000 units in Australia in 2023. That’s 50 per cent of all their sales.
Selling anything like 3000 Macan EVs would mean outselling every other electric vehicle here bar the Tesla, BYD and MG models (based on 2023 numbers) all of which are massively cheaper. Whilst there will, for sure, be some early pent up demand for the car, the real question will be whether that demand is sustainable at a decent level. It would be a brave person to bet against the re-introduction of an ICE powered Macan at some stage in the future. After all, Porsche have committed to offering the petrol engined Macan in the USA for some time to come.
This backdrop of very disorderly marketing of EVs in this country right now will only serve to put off wavering potential buyers from changing over from ICE models at the time of their next purchase. It’s a shame that both governments and manufacturers are trying to force consumers to change horses at a rate that doesn’t work for them and they’re very uncomfortable with.
Ultimately, the market will decide. And that’s clearly going to be very messy here for some players as well as many early adopters who, after negative value experiences, may well choose to revert to ICE or hybrid vehicles from EVs.
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