Budget-friendly car comeback

Sales of light passenger cars in Australia have slowly been dipping further and further over the years but an unlikely new entrant may turn this around.

Last year China’s BYD announced the pricing for its new entry-level Atto 1 electric hatchback. With a mind-blowing starting price of $23,990 before on-roads, it’s the cheapest new electric vehicle (EV) in Australia by a strong margin.

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One of the few cars that undercuts the Atto 1’s competitive starting price is the Kia Picanto, which is still Australia’s cheapest new car. It starts from $19,190 before on-road costs.

During 2025 a total of 7166 examples of the Picanto were sold, which is up 23.1 per cent year-on-year.

Despite being the cheapest new vehicle in Australia, it’s not the best-selling light passenger car. This crown goes to the MG3, which currently starts from $21,888 drive-away. A total of 8350 examples were sold last year, though this is technically down 33.5 per cent year-on-year.

There are clearly still many Australians looking at the budget end of the new car market to make a purchase, especially as cost of living crunches.

Many carmakers are now finding it hard to sell such a car profitably while still packaging all the required safety equipment and meeting tightening emission standards.

This is where EVs like the BYD Atto 1 could thrive as they don’t emit any CO2 tailpipe emissions.

In terms of other small-to-light EV hatchbacks that are due to launch locally over the next 12 months or so, MG has confirmed it’s introducing its new, city-focused MG4 Urban, plus Leapmotor is launching the B05 electric hatchback in the second half of 2026.

Many Australians now prefer SUVs over small hatchbacks and sedans.

SUV sales in Australia have been going from strength to strength for years now and there are plenty of budget offerings that in some cases are cheaper than hatchbacks and offer more space.

Examples include the Chery Tiggo 4, GWM Haval Jolion and Mahindra XUV3XO which all start at $23,990 drive-away.

Around the same time BYD announced the Atto 1 electric hatchback for Australia, it also confirmed it’s introducing the Atto 2 small electric SUV locally.

It’s priced from $31,990 before on-road costs, which makes it Australia’s cheapest electric SUV though it’s still $8000 more than the overall cheapest SUV.

There are plenty of other budget-oriented electric SUVs available including the Hyundai Inster which currently starts at $35,990 drive-away thanks to an offer, as well as the Chery E5 and Leapmotor B10 which both currently start at $38,990 drive-away.