Economic uncertainty dampens EV enthusiasm
Aussie consumers are losing interest in EVs amid cost-of-living pressures and questions around battery lifeConsumer interest in EV has continued to wane, with carsales’ own data revealing a 22 per cent decrease in the number of new-car buyers considering an EV.
According to our analysts, the lifetime EV purchase consideration metric has dropped from 56 per cent in mid-2022 to just 34 per cent as of mid-2024, despite the increasingly accessible array of models coming to market and ever-evolving vehicle technology.
The numbers translate to one-in-three new-car buyers considering an EV purchase in their lifetime as opposed to the previous one-in-two peak, with cost-of-living pressures being one of major factors.
These results have been extracted directly from the eight carsales EV survey which canvassed 2096 Aussies about their new-car buying plans, 59 per cent of whom cited price as the biggest factor preventing them buying an EV.
“Price sensitivity has increased due to the rising cost of living and higher interest rates over the past two years,” carsales senior research and insights specialist Gage Milecki said.
“These economic pressures have made EVs seem less affordable to many consumers.”
Despite the doom and gloom surrounding EVs at present and a couple of months in decline, sales of BEVs are still up 18.1 per cent year-on-year for the first six months of 2024.
Battery replacement the biggest concern
Milecki said there were prevalent misconceptions around EVs, with some 66 per cent of the circa-2100 respondents whose biggest ‘concern’ around EV ownership was the cost of replacing the battery.
“Concerns about battery replacement are widespread, with many worrying they would need to replace the battery every three to four years at a substantial cost,” he said.
“In reality, EV batteries are designed to last much longer and are more durable than perceived.”
Most mainstream car brands offer battery warranties between seven and 10 years (or 160,000km), with eight years being the most common duration.
Cruising range was the next biggest concern at 58 per cent, followed by the availability and proximity of charging stations (55%) and how long the car will last before needing to be replaced (53%).
Depreciation (49%) was the fifth biggest concern around EV ownership, something that’s hurting many of the luxury players.
It remains to be seen whether a growing number of entry-level, sub-$40,000 EVs like the GWM Ora, BYD Dolphin and MG MG4 are having an effect on buyer intentions.
EV subsidies go unnoticed
The termination of government subsidies for EV purchases in Australia’s two largest car-buying states – New South Wales and Victoria – are unlikely to have skewed the results either.
“Nearly half of the respondents we surveyed from both Victoria and New South Wales were unaware of the government subsidies for EVs, both current and past,” Milecki said.
“This lack of awareness suggests that the removal of these subsidies would likely go unnoticed by most people. Additionally, government subsidies do not generally convert non-considerers into considerers of EVs.
“In a hypothetical scenario where we asked non-considerers if they would consider purchasing an EV with an approximately $3000 subsidy, only nine per cent indicated they would.
“Therefore, we can reasonably conclude that the removal of government subsidies in New South Wales and Victoria has not played a significant role in the declining consideration for EVs.”
Looking into the future, a majority of respondents (30%) said petrol vehicles were the preferred choice ahead of hybrid vehicles (22%), EVs (21%) and diesel vehicles (20%), with five per cent saying ‘other’ and four per cent saying they won’t be driving in 2035.
It marks a significant shift from mid-2022 when EVs were leading future buyer intentions by 2035.
Drilling into the demographics, Gen Z respondents believed they were least likely be driving an EV by 2035, despite being the generation perceived as the most environmentally conscious.
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