Thinking of buying an electric vehicle for your next car? Here’s the market outlook and what to consider

As gasoline prices soar and the impacts of climate change are felt, many people are probably wondering if their next car should be an all-electric vehicle.

Yes, initial costs are usually higher – but what does the future hold? Will the prices go down in the coming years and what costs should you factor into your decision?

The sad truth is that unless the political parameters in Australia change, we should not expect a significant increase in the number of electric vehicles (EVs) available to Australians over the next few years.

It is important that we all start switching to this cleaner technology, but unfortunately this choice is not available to many Australian households and businesses due to a lack of supportive local policy.

Read more: Here’s why electric cars have plenty of grunt, punch and torque

Costs to consider

Electric vehicles in Australia currently cost AU$15,000 to AU$20,000 more than petrol or diesel cars. But in some market segments — like some sub-premium sedans priced between $60,000 and $75,000 — they’re already at par.

Several manufacturers have promised to bring more supply to the Australian market in 2022, but many of these vehicles were supposed to be here in 2021 (with their arrival pushed back).

If you’re considering switching to an electric vehicle, here’s what to consider:

  • don’t just focus on the price. With petrol prices now over $2 a litre, many Australians will find themselves paying over $2,000 for fuel each year for every car they own. Electric vehicles can be priced for the equivalent of around $0.20 per litre, or even cheaper when using solar power from your home. These savings add up, totaling more than $20,000 over the life of the vehicle.

  • Electric vehicles are cheaper to maintain and in some cases have no maintenance costs. This equates to thousands of dollars potentially saved over the life of the vehicle.

  • what about charging? Anywhere you have access to a standard power outlet, you can charge an EV. With cars parked 90% of the time and mostly driven less than 50 miles a day, a few hours of charging is more than enough for most. If you want faster charging, you can install a wall charger in your garage. And if you park on the street, you can use the growing list of public fast chargers across the country or ask your workplace to install a charger.

The reality, however, is that if there is no change in the policy parameters, we can expect the EV market in Australia to remain roughly the same this year and for many years to come. to come.

This means that many Australians will have no choice but to continue paying for expensive imported fuel, instead of using cheap Australian energy to power our vehicles.

Are all EVs expensive?

There is a wide range of electric vehicle models. It’s just that most of them aren’t sold in Australia.

One of the downsides of Australia is that we’re a market for right-hand drive vehicles, and many European and American EVs just aren’t built that way. The UK is also a right-hand drive market, where people have similar average incomes and quality of life as Australia. But the market for electric vehicles there is very different with more than 160 models of electric vehicles compared to around 50 in Australia.

The main difference is that the UK has a (conservative) government that has embraced the technology and understands the wider economic benefits of making electric vehicles easy to obtain and use.

Yes, Australia has strengthened EV charging infrastructure, but that’s not enough to encourage manufacturers to bring more models to this country (which would help get more affordable EVs to market).

What would the Australian market look like if we had a support policy? Well, there are around 80 million cars sold worldwide every year, with around 1 million of them in Australia. We therefore represent approximately 1.3% of the global automotive market.

There were around 6.6 million electric vehicles sold worldwide in 2021. So 6.6 million x 1.3% equals around 85,000 cars. That’s 85,000 electric vehicles that should have been sold here last year if our market was in line with global trends.

But in fact, the number of electric vehicles sold here was just over 21,000 in 2021. So we’re about a quarter of the size we should be.

There’s a lot of demand for electric vehicles in Australia, we just can’t get enough of them because we don’t have the right policy settings.

There’s a lot of demand for electric vehicles in Australia, we just can’t get enough of them.

What policies could help?

Policies that would help make electric vehicles more affordable in Australia include:

  • incentives to reduce the initial cost of electric vehicles. Some people say it subsidizes the rich, but smart policy would support jobs in Australia’s energy market. It is estimated that we spend over A$30 billion annually on foreign fuel for our cars. Redirecting that money into powering electric vehicles would help keep those billions in the country and support local Australian energy jobs.

  • we don’t have an energy efficiency standard, which puts us in bad company with Russia as two of the last major economies without such standards. This is why people say Australia is a dumping ground for vehicles that are illegal to sell overseas. Markets that have energy efficiency standards get the entire supply of electric vehicles.

  • having a clear EV sales target for the next five to 15 years would help achieve net zero by 2050 – in other words, selling the last petrol or diesel car by the mid-2030s.

So, what is the market outlook?

Not much will change in Australia unless there is a policy change. We compete with markets that have the right policies to drive EV sales. Manufacturers will of course give priority to supply.

There will be small increases in electric vehicle sales in Australia each year. But it will take several years for the supply of these new vehicles to accelerate.

I’m sorry to be the bearer of bad news. And hopefully your next vehicle purchase will be an electric vehicle, after factoring in all costs over the life of the vehicle. It’s the right thing to do for the climate, and the long-term savings are attractive, especially if fuel prices continue to be so volatile.

Sadly, however, Australians shouldn’t expect electric vehicles to suddenly become cheap and easy to buy here in the next two years – unless policy changes.

Read more: Australia’s embarrassing, tax-free way to cut the cost of electric cars

About Leah Albert

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