The long-awaited electric car price parity is already here with the BYD Dolphin, Leapmotor C10 and Geely EX5, but do new car buyers even care? | Analysis

Price used to be the biggest hurdle to electric car adoption, but not anymore.

Research conducted by the Electric Vehicle Council in 2022 suggested half of new car buyers were considering switching to electric, but the number one concern was the upfront cost.

One of the best value offerings at the time was the Tesla Model 3, which started from a whopping $64,300. Consumers were expected to pay $15,000 to $20,000 more for an EV compared to an equivalent petrol model.

A lot has changed.

The electric car market has expanded significantly and costs, both from existing players and those new-to-market, have come down significantly.

The upgraded Tesla Model 3, which now features more driving range and features, starts from $54,900, and you can hop into a fully electric car from as low as $29,990 (for the BYD Dolphin Essential).

Not only have costs come down, but the amount of choice has exploded. The just-launched Leapmotor C10 is a mid-size family SUV, which starts from $45,888 before on-roads (or just $47,500 as part of an initial drive-away offer). It’s a price-tag equivalent to a mid-spec Toyota RAV4 — Australia’s most in-demand hybrid SUV — and soon it will have to compete with not only the Xpeng G6 but the Geely EX5.

We may have expected electric car price parity to arrive with some fanfare, but it has almost arrived with barely a whimper.

Top-selling models, including the Tesla Model Y, still seem to be a price-step above combustion options. There’s a vibrant price-war amongst the increasing number of Chinese automakers available and in an increasing number of segments, but it seems like electric cars have lost their lustre a bit amongst new car buyers.

As a result, the latest data from the industry has those considering purchasing an EV dropping significantly.

It’s not all over for electric cars as some doom and gloom headlines proclaim, often citing softening (but still growing) sales in Australia. There are also much more dire figures out of Europe causing some of the biggest manufacturers to issue embarrassing about-faces on once-bold all-electric commitments, as customers reject new products in droves.

So why is this happening? Do Australian new car buyers even want an EV anymore, and are we set to follow in the footsteps of other places that have seen an EV sales slow-down?

The issue has several factors, all of them economic rather than ideological, despite what the comments section would have you believe.

Consumer confidence in the new car market has declined significantly with high interest rates. The January 2025 sales data from the Federal Chamber of Automotive Industries (FCAI) showed a continued decline in EV sales following a soft second half of 2024, but also a rapid increase in registrations at the lowest end of the market. Significant winners so far this year include the Kia Picanto, Chery Tiggo 4, MG3, and outgoing Mitsubishi ASX, all budget petrol-powered offerings, and a far cry from the usual mid- or high-spec SUVs which have dominated sales charts for some time.

Another significant factor is the removal of EV incentives from most states.

The amount of competition in the Australian market has had a knock-on effect of slaughtering the resale value of existing EVs. Imagine having bought a pre-upgrade Model 3 in 2022, only to have its value halve in three years because the new one is not only better, but it’s nearly $10,000 more affordable, too.

Then there’s the consideration of why buy a two- or three-year-old, relatively high kilometre Tesla, when you could have a brand-new BYD Seal with a box-fresh warranty from $46,990. Buyers have begun to question whether now is the right time for a purely electric vehicle, when they could simply wait for prices to stabilise, buying or holding on to a combustion car in the meantime.

Fuel prices are hovering around $2 a litre and Australia’s New Vehicle Efficiency Standards (NVES) will begin to have a significant impact on the model mix available. Hybrids appear to be the biggest beneficiaries. Sales are up a whopping 76 per cent year-on-year, driven by the return of the supply of popular Toyota models after a long period of parts shortages, and an explosion of new options available from Hyundai, Kia, GWM, Honda, and Nissan.

This slowdown in EV consideration is a natural part of the process and what has to happen to bring the technology to the mainstream as automakers scramble to have the best, most affordable vehicles available.

It’s the most keen early-adopters of electric vehicles who will feel the brunt of this. Their vehicles have been hit by the biggest declines in value, and they’ve had to put up with an immature charging network and even some additional expenses, like higher insurance costs.

Still, the Australian market continues to evolve. While consumers seem to have turned more to hybrids, EV sales still grew in Australia, up 4.7 per cent over the course of 2024. They accounted for 91,292 units or 7.4 per cent the market and more options particularly at the same price of popular hybrids should continue to convert buyers.

Australia has plenty of growth in the EV sector to go. Australia has the highest uptake of household solar in the world, which would, in turn, mean that Australian households with the ability to charge in their garage will have some of the lowest per-km cost to recharge their electric vehicles.

The biggest factor in the long-run though will be the NVES. Finally catapulting Australia into the world of 21st century emissions policy, this policy will really start to bite in the second half of the decade. Almost every mainstream automaker who has spoken to CarsGuide on the topic has earmarked serious changes to their line-up, with a high percentage of pure electric vehicles necessary for them to avoid hefty fines from the government.

It’s also worth noting that at 7.4 per cent adoption, while Australia has been a little slow on the uptake, it’s hardly hit the saturation point which many European jurisdictions and some Chinese cities have reached, which is a big source of their respective market slow-downs.

What’s the take-away? While price-parity EVs have quietly arrived in Australia with minimal fanfare, the path for growth here seems more sustainable than the great swings and misses we’ve seen overseas.

Periods of explosive growth and unsustainable subsidies are behind us, and a slowly-but-surely set of policies in place here seems to be adding incrementally to Australia’s electric fleets rather than moving from huge sales to gutting losses for automakers, and in the long term, this should add confidence for EV buyers rather than doubt.