Why buying an electric car is a gamble: Jeep Avenger joins Ford Mustang Mach-E, Subaru Solterra and more with pre-launch price cut | Opinion

There’s few worse feelings than buying a new car and then finding out it’s now cheaper. Not only do you feel like you’ve been swindled but it only hurts your depreciation even more than normal.

But what about when the car gets a discount before it has even gone on sale? And what happens if it keeps happening? That suggests an underlying problem with whatever these new cars are.

The Jeep Avenger became the latest all-new offering to get a price haircut before it even reached dealerships, joining other recent examples including the Audi Q4 e-tron, Subaru Solterra and Ford Mustang Mach-E (to name the most high-profile examples).

And what do these have in common? If you guessed electrification, well done (although it was pretty easy, so don’t gloat). 

Electric car prices are volatile and show no signs of settling down anytime soon if the Jeep and Audi are any indication. Jeep announced the Avenger will now be between $3000-$4000 cheaper than first announced, while Audi trimmed $3400 off the long-awaited Q4 e-tron.

Subaru was even more generous (or realistic, depending on your perspective) when it slashed $6700-$8000 off its first EV, the Solterra, before it was in a customer’s hands. But even that pales compared to the Mustang Mach-E, it has ended up a whopping $15,000 cheaper now than it was when it launched. Officially it had one price cut before first deliveries and then another once the first rush of buyers slowed and fresh incentives were needed, but such a price cut within a short time period is not a positive sign for buyer confidence nor is it a help for re-sale.

And lest you think this is all limited to just the new players trying to grab market share and attention from the established players, earlier in 2024 Tesla dropped the price of the Model Y Rear-Wheel Drive by $9500 in the space of two months. 

Put simply, buying an electric car is a risky investment. The rapidly changing landscape means that anyone thinking of buying an EV will be hesitant to sign on the bottom line for fear of over-paying, while also basically making residual values a complete lottery, if not a write-off.

Not surprisingly this uncertainty has seemingly stalled EV sales growth in Australia. As of August 2024 EVs make up about 7.6 per cent of the market, which is only slightly more than August 2023, despite the flurry of new models and their price cuts. 

Obviously making a car cheaper should enhance its market appeal, but if it becomes so common it impacts consumer confidence it has the opposite effect. The underlying question is whether or not these price changes are causing the stall in EV growth or merely a symptom of it.

Car makers got very excited over the sudden surge in EV interest a few years ago, but with very little incentive to buy one in Australia the early adopters are now satisfied and electric cars now need to sell on merit.

The car companies will now be hoping the New Vehicle Efficiency Standards (NVES) they largely fought against will now be their salvation. It will increase the incentive for car brands to sell electric and hybrid models, which will ensure Australian new car buyers get the most competitive offerings - whether they want an EV or a petrol or diesel model.

In the meantime, don’t be surprised to see more price changes for EVs, whether they’re already on sale or yet to hit showrooms.