The electric vehicle (EV) market in Australia has reached a new milestone, with a leading manufacturer offering a model for under $31,000 for the first time. This price breakthrough, while significant, is mainly seen in the smaller and more affordable EV segment. Industry analysts, however, point to the fact that higher-end electric vehicles continue to face price barriers, largely due to the country’s tax system.
One of the key players driving down EV prices is MG, a popular automotive brand in Australia. In a recent move, MG Motor Australia reduced the price of its entry-level MG4 hatchback to $30,990, marking a substantial $8,000 reduction from its previous price in August. This promotional offer, available until the end of October, positions the MG4 as the most affordable electric car currently available in the country.
Despite the strong sales figures of the MG4, which have seen more than 3,387 units sold by August 2024, MG’s decision to lower prices is intended to further encourage hesitant buyers. According to Giles Belcher, Chief Commercial Officer of MG Motor Australia, the price cut aims to motivate those who have been contemplating the transition to electric vehicles but have been deterred by cost concerns.
“We understand that many potential EV buyers have been on the fence due to the higher upfront cost of electric vehicles,” Belcher stated. “With this price adjustment, we are making it more accessible for Australians to make the switch to greener, more sustainable transportation.”
MG is not the only brand to slash EV prices in Australia this year. Other manufacturers, such as BYD, GWM, Tesla, Lotus, Renault, and Peugeot, have also joined the competitive pricing battle. The GWM Ora hatchback, for example, saw a price reduction to $35,990, after previously holding the title of Australia’s cheapest electric car until MG’s recent move. Similarly, the MG SZ EV also experienced a price drop to $34,990 in August.
While the battle for market share in the sub-$70,000 electric car segment continues to intensify, industry experts point out that this fierce competition is largely confined to smaller, budget-friendly models. Scott Maynard, Managing Director of Polestar Australia, noted that the market for high-end electric vehicles has been hampered by the country’s tax policies, particularly the luxury car tax (LCT).
The LCT, which imposes a 33% tax on vehicles priced above a certain threshold, has been criticized as an obstacle to the growth of Australia’s premium electric car market. Maynard argued that the tax, originally introduced to protect the domestic car manufacturing industry, no longer serves its intended purpose, as local manufacturing has ceased.
“The luxury car tax, especially when applied to electric vehicles, is outdated and no longer relevant in today’s market,” Maynard said. “Its removal could unlock greater competition and bring more high-end EV options to Australian consumers.”
This sentiment was echoed during a recent inquiry into the transition to electric vehicles, where the Australian Automotive Dealer Association highlighted concerns that the luxury car tax is discouraging some manufacturers from importing premium electric vehicles into Australia. The tax, they argued, makes the country a less attractive market for luxury electric cars, reducing consumer choice and slowing the adoption of electric vehicles in the upper market segments.
Despite these challenges, the rapid price reductions in the affordable EV sector signal a positive shift for the Australian market. More consumers are likely to consider making the switch to electric vehicles, especially as prices fall closer to those of traditional petrol and diesel cars.
For Australia to further embrace the electric vehicle revolution, however, more needs to be done to address the barriers that remain for premium models. Abolishing or reforming the luxury car tax could pave the way for increased competition and bring Australia’s high-end EV market in line with global trends.
In the meantime, manufacturers like MG, GWM, and BYD continue to drive the transition toward a more electric future, making EV ownership more attainable for everyday Australians. As more affordable models hit the market, and price wars among brands intensify, Australia is on the verge of a significant shift in its automotive landscape—one that could make electric vehicles the standard choice for many drivers.
