Why this electric SUV won't suffer the same fate as the Tesla Model Y and BYD Seal

One byproduct of the explosive growth of the electric vehicle market has proven to be unstable pricing.

It’s a natural effect of new technology evolving quickly and brands keen to get (or keep) their competitive advantage being willing to pull more drastic levers to stay afloat.

Sometimes this is driving range or performance, but more often than not in today’s market as the amount of competition heats up, it’s price.

The effect of this competition is more affordable EVs for buyers, but it also means those who bought in the last few years are faced with new price points tanking the value of their near-new cars.

No brand has drawn more ire for this than Tesla, which has slashed the price of its Model 3 and Model Y to keep new-age Chinese rivals at bay.

Finally launching into this fray before the end of 2024, is Skoda. The Czech alternative marque will finally be fielding its Enyaq SUV in Australia and speaking to CarsGuide at the launch of its Kamiq small SUV, the brand’s head of product and marketing Kieran Merrigan explained how the Enyaq will be positioned and how it will set itself apart with stable but sustainable pricing.

“You’re always looking at how affordable you can get a vehicle without doing injustice to your brand.” he said, “It’s not just the purchase price, but the total cost of ownership. Kodiaq RS is doing the bulk of sales [for that model] and it’s in the mid-$70k region. Wherever Enyaq is positioned in the end, we’re confident it will have a large community who will spend that sort of money on our brand and will see the value in it.

“Our customer is educated, potentially leading the charge in changing vehicles and trying something new.”

Merrigan also said Skoda’s guaranteed future value program would apply to the Enyaq from day one to give buyers confidence their Enyaq won’t lose significant value a year or two after its arrival.

“With our guaranteed future value program, I think that’s even more important as we get into BEVs. We’ve seen what happens with residual values as we get into electric cars. We’re obviously very keen not to repeat what we’ve seen with other brands, but as a buyer, overcoming that objection of ‘what’s my residual value going to be based on the sins of others’. If we can protect that, it eliminates that risk.”

However, part of the reason EV prices may continue to fluctuate is the introduction of the New Vehicle Efficiency Standard - the first of its kind in Australia, which will aggressively drive down the amount of fleet emissions permitted by automakers to avoid fines. The inevitable result will be more automakers willing to drop prices to get their EVs on sale faster.

According to VW Group communications boss Paul Pottinger though, the situation between Australia and Europe won’t have a significant effect on Skoda’s EV plans.

“The European and Australian situation is barely comparable. The EV market here is in its infancy. The conditions to create ease of EV ownership are in their infancy. You see European manufacturers talking now about the introduction of tariffs [on Chinese-built vehicles which is locking out low-cost rivals]. People already pay tariffs here. There’s still a five per cent tariff on ICE imports.”

And when it comes to pricing and competing with those Chinese rivals in Australia, Pottinger says it’s the same story and certainly not too late for VW Group vehicles like the Enyaq to make an impact.

“It’s the same answer — we’re still in our infancy here. Until last year there were three models — two Teslas and one BYD which make up most of the market. This is not a mature EV market, it’s only going to become so.

“Skoda is only just embarking on its BEV journey. More broadly, VW Group has gone from a handful to many in a short space of time. By the end of the year, we’ll have Enyaq in market, VW will have ID.4, ID.5, ID. Buzz, Cupra will have Tavascan.

“We’ll have [Enyaq] start deliveries from September. We’ll have a GFV product added to that car from launch. We’ll have a good range, we’ll have good power and torque. It’s also the most powerful ever Skoda.”

Despite the global EV market shrinking this year in significant markets like the US, Europe, and China, it is still growing in Australia, up 18.1 per cent in the first half of 2024. It’s no secret, however, that all VW Group EV products will have a fight on their hands. 

Not only will they have to shake the current EV hegemony of Tesla and BYD, but they’ll also have to face promising new rivals ranging from Kia’s EV5 to Xpeng’s G6 as the number of makes and models available to buyers continues to rapidly expand.

The Enyaq is expected to initially launch in two variants, a standard variant and an RS variant before the end of 2024. In 2025 it is expected to be joined by the Elroq electric small SUV, with a crossover dubbed the Epiq and a seven-seat electric equivalent to the Kodiaq set to arrive beyond 2025.