Chinese electric cars flood into a more “friendly” market

BYD and other Chinese automakers have been steadily bringing new electric models to Australia, a market where they face no trade barriers and sales have soared thanks to local government incentives for electric vehicles and soaring petrol prices.

Since taking office in 2022, Australian Prime Minister Anthony Albanese has been aggressively promoting the use of electric vehicles as part of his plan to cut the country's greenhouse gas emissions.

That has created a strong tailwind for electric vehicle demand in the Oceania nation, with electric vehicles accounting for 7.2% of new car sales in Australia by 2023, up from 3.1% the previous year.

Although Australia is a relatively small market on a global scale with 1.2 million cars sold last year, it is very attractive to Chinese automakers because the “Kangaroo Country” has no car manufacturing industry and has an open trade policy.

For example, Chinese startup Leapmotor has partnered with renowned carmaker Stellantis to expand globally. The Chinese electric carmaker has designated Australia as its priority market, knowing that there are no local carmakers there.

While Tesla is the global leader in electric vehicles, it is the Chinese manufacturers in the lower-end segment that pose the most formidable challenge to established Australian carmakers such as Toyota and Ford, brands associated with traditional petrol vehicles.

World - Chinese electric cars flood into a more — Showroom of Chinese electric car maker BYD in Sydney, Australia. Photo: Which Car

Last year, sales of electric vehicle giant BYD, which enters the market in 2022, jumped almost sixfold to more than 12,000 vehicles. Data from the Federal Automotive Industry Chamber shows the Warren Buffett-backed automaker now accounts for 14% of Australia’s electric vehicle market, behind Tesla’s 53%.

“The opportunity is clear,” said David Smitherman, managing director of EVDirect, BYD’s Australian distributor. “We now need to penetrate the mass market, because we’ve already sold to the early adopters and enthusiasts.”

BYD will add two SUVs and a pickup truck this year to bring its Australian product range to six, Mr Smitherman said. EVDirect will also open 30 more dealerships in the next 18 months, bringing the total to 55, and has already begun selling vehicles to companies like Uber.

China's state-owned SAIC Motor will launch three new models this year under the MG brand, including the MG3 plug-in hybrid and MG Cyberstar electric roadster, bringing its total EV/hybrid product line-up in Australia to five.

Long-standing carmakers in Australia are also getting in on the act. Ford, for example, has two electric vehicles in the market and three more in the pipeline, according to a company spokesperson.

Toyota has launched its first electric car, along with nine hybrid models, in Australia. The hybrids have lower emissions than their gasoline-powered counterparts. The Japanese car giant said it was confident in its strategy of offering a wide range of hybrids while steadily growing its battery-electric vehicles.

The Australian government has offered a range of incentives to boost demand for electric vehicles, including tax exemptions and rebates. Several states have also set ambitious electrification targets and are investing in charging infrastructure to help accelerate the transition.

There are high expectations that demand for electric vehicles in Australia will continue to grow, although forecasts vary. PwC estimates that half of new car sales in Australia will be electric by 2027. Fitch Ratings predicts that figure will be 18% by 2032 .

Minh Duc (According to Reuters, Republic World)

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