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Are Electric Vehicles Losing Traction in the Market

In a year where new car sales catapulted to new heights, surely it would be reasonable to expect that ‘green’ vehicles with alternative fuel technology shared in this growth? If anything, starting from a low base, one might even expect that their year-on-year growth significantly outperformed petrol and diesel vehicles. After all, Australian motorists are supposedly becoming more environmentally conscious and converting to green technology, no?

Imagine the surprise then, reviewing the recent sales figures for electric vehicles and hybrids in Australia throughout 2016. Electric vehicles in the private passenger segment decreased from 220 sales in 2015, to a dismal 65. That’s right. Not only did electric vehicles in this segment fail to make any meaningful progression, but a mere 65 were sold right around the country over the course of 366 days – lucky to have that extra day too.

As you look across the board in other segments, the numbers for electric vehicles don’t get much better. Sales in the non-private passenger sector decreased 30% (101 vehicles sold). The Private SUV sector sold 7 vehicles, down 92% from 2015 – a number just high enough to count on two hands. The non-private SUV sector decreased 93% from 661 sales in 2015, to 42 in 2016. There’s really no silver lining here at all.

Hybrid vehicles fared significantly better than their ‘eco-friendly’ counterparts, albeit underachieved in some areas. Within the private sector, hybrids saw a respective drop of 4% and 21% for passenger and SUV vehicles. The number of sales for each category however, remains somewhat more respectable than those for electric vehicles at 2,588 and 840.There was encouraging progress in the non-private sector for hybrids, with passenger car sales recording a 9% gain (now 8,049), and SUVs notching up impressive growth of 25% to reach 1,148 sales.

Why then, despite the great fanfare surrounding Tesla’s Model 3 last year in April, are alternative fuel vehicles, particularly electric vehicles, struggling to penetrate into the Australian market? Other countries including Norway and India have already announced initiatives to move towards alternative technology, why is Australia late to the party? Is it a case of motorists pinning their hopes on Tesla’s vehicle, and in the meantime exposing the frailty in the EV market?

We’ve heard calls from Federal and state governments, the Australian Greens Party, auto-makers like Audi, and other key stakeholders for electric vehicles to be supported through an assortment of initiatives – cheaper rego, lower insurance premiums, subsidised charging, and even the prospect of toll discounts. These are all initiatives that will no doubt prove helpful – if not for the fact that there are two other pressing issues which steer motorists away from electric vehicles – a lack of infrastructure, and vehicle prices.

When Tesla’s Model 3 goes on sale later this year, it is set to be priced at $47,500. That’s an improvement over current offerings in the EV market, which range between $55,000 and $130,000. However, the reality is, such a price still represents an imposing figure to motorists who now have access to many ‘affordable’ models of regular vehicles from luxury automakers. Combine that with the fact that motorists are still limited for choice in terms of the necessary infrastructure, and it’s no surprise electric vehicles are losing traction in the market.

The Model 3 could be the starting point for a reversal in sales, but without a fundamental shift from other manufacturers, and the necessary support, it could be some time before traditional vehicles are having to fight for their overwhelming market share.

 

One comment

  1. Vania says:

    I think it’s more like lack of infrastructure. People has been using hybrid cars for centuries. To change the lifestyle, electric vehicles have 2 ways to go. Either it needs to be pushed as a law or else supporting infrastructure should be available everywhere and all the time.

    February 5th, 2017 at 11:38 pm