Electric car sales treble, but Australia lags without investment: EVC

Electric car sales treble, but Australia lags without investment: EVC

Sales of electric cars trebled over the last year, but a lack of government support is preventing car makers from bringing more affordable models to Australia, a report by an industry authority claims.

The ‘State of Electric Vehicles’, an annual report conducted by the Electric Vehicle Council (EVC) industry body, found 6718 electric cars were sold in 2019 in Australia -- more than three times the 2216 sold a year earlier.

Electric vehicles make up a small percentage of car sales nationally -- about 0.6 per cent, but the rise in demand bucks the downward trend in sales facing petrol and diesel vehicles, the report notes.

“For most Australians, an electric vehicle is a far more convenient option to run than a combustion engine alternative – even if you hit the highway regularly,” Behyad Jafari said, chief executive of EVC.

“But despite the healthy enthusiasm for electric vehicles from the public, Australian governments are still badly lagging the world when it comes to supportive policy.”

More affordable electric cars are needed in Australia: EVC

Electric cars are slowly shifting from a novelty for early adopters to a serious purchase by the mainstream public, an EVC survey of 2902 Australians found.

About 56 per cent of people surveyed this year are considering an electric car for their next vehicle, representing a three per cent rise compared to last year.  They were drawn to their environmental footprint, lower running and maintenance costs, and relative performance. 

There’s about 28 electric car models in Australia, but only eight of them are priced below $65,000. 

And the purchase price of electric cars is a hurdle that the industry needs to overcome, the report said, but manufacturers are unlikely to bring them to Australia without government incentives. 

“Globally, carmakers are rolling out more electric vehicle models, but so far production cannot keep up with demand,” the report said.

“This means that without (government) policy signals, Australians will continue to be denied access to the full global range of electric vehicles.”

Six additional electric car models are expected to launch in Australia by the end of 2021; two of them below the coveted $50,000 price point.

  • The expense of electric or hybrid cars may be offset by securing a green car loan. Some lenders have lower interest rates than regular car loans, while others may waive fees and redraw charges. Compare green car loans here, or learn more about them.

How far will a charge take you? And where?

The majority of people surveyed underestimated the range of electric cars. According to EVC, 79 per cent thought it was less than the 400 kilometer range they can reach on average.

When driving and the batteries run low, they can be recharged at 2300 stations across the country. 

The number of standard stations (below 50kW) increased by 16 per cent in the last financial year to 1950, while more powerful stations (above 50kW) increased by 42 per cent to 350 locations across the country.

Most of the investment in charging infrastructure was driven by the private sector, EVC said. Some support came from the state government, and from the federal government’s Australian Renewable Energy Agency.

“Given the importance that consumers place on charging infrastructure availability, it is imperative that private and public investment in infrastructure continues,” the report said. 

“Testament to this, Infrastructure Australia has included the rollout of a national electric vehicle fast-charging network as a High Priority Initiative in its 2020 Infrastructure Priority List.”

Australia is missing the electric car revolution: EVC

Electric cars account for 0.6 per cent of vehicles sold in Australia, but they make up from 2.5 to 5 per cent of sales in developed countries, according to EVC.

Adoption rates would be higher if federal and state governments “proactively positioned Australia’s transport sector to benefit from electrification” by incentivising the roll out of electric charge stations and infrastructure, Mr Jafari said. 

“Australian drivers are ready to embrace electric vehicles and release the myriad benefits of that transition, but they’re still waiting to get a clear green light from government,” he said. 
"The US and Europe have shown us what works, all Australian leaders have to do now is join the party.”

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Learn more about car loans

Can you get a chattel mortgage with bad credit?

Getting approval for a chattel mortgage with bad credit may be possible, given ‘chattel’ (usually a piece of equipment or car) is put up as security for the loan. That means if you fail to repay the loan, the creditor can recover the loaned amount by repossessing and selling the car or piece of equipment. This differs from unsecured car loans, where the asset is not tied to the loan and cannot be taken if you don’t meet the repayments. 

What is depreciation?

Depreciation is the reduction in the value of your car. Almost every car loses value each year, although at different rates. As a guide, cars depreciate on average by 14 per cent per year in the first three years and then eight per cent per year after that.

What is resale value?

The resale value is the price you could realistically charge if you were to sell your car. Almost every car loses value each year, although at different rates. As a guide, cars depreciate on average by 14 per cent per year in the first three years and then eight per cent per year after that.

What is the luxury car tax?

The federal government imposes a luxury car tax of 33 per cent on the value of a car above a threshold. As of the 2017-18 financial year, that threshold was $75,526 for fuel-efficient vehicles and $65,094 for other vehicles. So a fuel-efficient car worth $80,000 would be taxed only on the difference between the threshold and the value of the car ($4,474), rather than taxed on the entire $80,000. Similarly, an ordinary car worth $70,000 would be taxed on the $4,906 above the threshold, rather than the entire $70,000. The luxury car tax is paid by dealers that sell or import luxury cars, and also by individuals who import luxury cars.

What is equity?

The equity is the share of the car that you own. For example, if you take out a $15,000 loan to buy a $20,000 car, you have $5,000 of equity in the vehicle, or 25 per cent. (The lender has the other 75 per cent.) Equity changes over time as you pay off your loan and your car depreciates in value. For example, two years later you might now owe $10,000 on your car, which might now be worth $15,000. In that case, you would still have $5,000 of equity in the vehicle, but your share would be 33 per cent.

How much is my car worth?

If you own a car, it may be something that can help you bring down the cost of your next vehicle purchase through its sale. However, before you can do that you’ll want to find out how much your car is worth.

Your car’s worth can depend upon various aspects, including:

  • Age
  • Condition
  • Model and make

A great starting place for aspects of this includes websites that offer online valuations, allowing you to enter your car’s make, model, year, badge and description, with the listed results displaying a price guide based on both selling your car privately and through a dealership.

Both have pros and cons, as cars can be very profitable, something that will no doubt impact any chance you have to make the most of your car’s value upon sale. Dealerships will try to profit on your trade-in by buying it for less than they can sell it for, so you shouldn’t expect the same price selling a car to a dealer that you would necessarily get selling a car privately.

How much is your car worth?

If you already own a car, you could potentially bring down the cost by selling your car in the process. Before that happens, though, you’ll need to find out how much your car is worth.

One of the first places to find this value is to research the value of your current car, giving you an idea of roughly how much it’s worth in its peak condition.

There are plenty of websites that offer a free online valuation, allowing you to enter your car’s make, model, year, badge and description, with results listing a price guide based on both selling your car privately and through a dealership.

Of course, dealerships will try to profit on your trade-in by buying it for less than they can sell it, making it highly unlikely that you’ll get the same price selling a car to a dealer as you would selling a car privately.

However, private car sales can be costly and can take months to sell, making car trading more convenient with a guaranteed return, even if you may not be able to realise the total value of your car’s worth.

Remember that everything is negotiable. If the dealership is offering you less for your trade than you wanted, try to negotiate elsewhere to gain that money back. Start by negotiating on the price of the trade and then ask them if they can give you a further discount on your new car.

What is an LVR?

The LVR, or loan-to-value ratio, is a percentage that expresses the amount of money owed on the car compared to the value of the car. For example, if you take out a $15,000 loan to buy a $20,000 car, you have an LVR of 75 per cent. LVRs change over time as you pay off your loan and your car depreciates in value. For example, two years later you might now owe $10,000 on your car, which might now be worth $15,000. In that case, although there would still be a $5,000 difference between the size of the outstanding loan and the value of the car, the LVR would now be 67 per cent.

How to get a chattel mortgage?

Both businesses and individuals may use a chattel mortgage, provided that the car is being used predominantly for business purposes. 

To apply for a chattel mortgage, you need to first consider your options and choose a suitable lender that meets your requirements. Once you have selected a lender, you can apply for the loan online by filling out a form. If the lender doesn’t offer an online application process, you can either call them or visit their nearest branch. 

After you’ve applied, the lender will ask you to supply documents that confirm your identification, income, job profile, etc. If everything is in order, most lenders will arrange the loan’s settlement, so all you need to do is pick up your car!

What is a car loan?

A car loan, also known as vehicle finance, is money that a consumer borrows with the express purpose of buying a vehicle, such as a car, motorbike, van, truck or campervan. Car loans can be used for both new and used vehicles.

What is a dealership?

A dealership is a car yard or a place where cars are sold.

Can I buy a car as a student?

Buying a car is a huge financial decision, and shy of marriage and purchasing a house (or perhaps around the world travels), it may be the biggest financial decision you make. But if you’re looking at your empty pockets, don’t despair! Your dream of owning your own car could become a reality, if you look for and compare the right car loans for your circumstances.

Where can I get a student car loan?

Student car loans are not a necessarily a product in and of themselves, but what you may be looking for is a guarantor car loan.

A guarantor car loan has a third-party act as a form of guarantee for your loan application, telling the bank or lender that if you default on your loan, someone will pay the loan repayments.

Going guarantor on a car loan is no new thing, and before internet-based credit scores, guarantor car loan applicants would apply for loans with a guarantor or property owner who could vouch for the person borrowing the loan.

To get a guarantor car loan, you’ll need someone willing to act as a guarantor for your car loan.

Where can I find car loans for single mothers?

Single mothers can sometimes find that due to their circumstances the bigger banks can be less inclined to lend to them, but there are smaller companies and specialist lenders who can be willing to provide loans to people in a range of circumstances.

Single mothers could benefit from getting in touch with a car finance broker, as a broker is likely to have knowledge and access to options that are suited to their needs.

Advantages to using a broker:

  • Finance brokers often don’t charge for their services as they work on a commission basis from lenders.
  • Brokers will have industry knowledge and contacts within lending companies and is therefore more likely to be able to find the best deal for your circumstances.
  • Brokers are qualified professionals who are licensed under the National Consumer Credit Protection Act so have an obligation to follow responsible lending practices and to work in your best interests.

Find car finance through a broker.