Yahoo Finance Chinese giant BYD butchers popular EV now left to rot in Aussie 'graveyard'
The electric vehicle manufacturer has posted record sales in Australia.
Electric vehicle (EV) manufacturers have slashed their prices by as much as $20,000 due to increased competition from companies like BYD. The Chinese-owned brand is having a field day with Aussie consumers and has recently seen record sales.
Tesla used to be the name on everyone's lips when it came to EVs, but BYD has emerged as a fierce competitor and sold 1,914 electric cars in Australia last month, well above its previous record of 1,622. Meanwhile, Elon Musk's company saw a two-thirds reduction in April sales, according to NRMA data.
Other brands have also been hit hard recently and car expert Paul Maric told Yahoo Finance that manufacturers appear to be rolling down their profit margins just to get stock off the lot.
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"It's all been spurred on by Chinese brands who have started bringing in much more affordable electric vehicles to what we're used to," he said.
"And typically what happens with volume brands is they don't really adjust their pricing after it's set. But we've seen brands like Peugeot take like $20,000 out of some of their electric cars, which is unheard of, and it also gives you an idea of how much margin they actually had built into them.
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"But it's Tesla that's probably been the most surprising. To have your key volume player in a segment ... take the Model Y for example, it peaked at $72,000, it's now $55,000. To take that much money out is quite remarkable to see."
Australian BYD importer EVDirect said business has been booming of late and the brand is bucking the trend of other EVs seeing stagnation or a decline in sales.
“We’re not seeing that,” EVDirect chief executive David Smitherman said. “We’re certainly seeing increased activity across our business, our websites are recording really strong inquiry, as are our dealers.
“I think it’s certainly getting very competitive out there, that’s for sure, with a lot more product being offered.”
BYD is continuing to enter popular markets in Australia, with a plug-in EV ute called the Shark launching later this year.
Globally, BYD got close to its all-time sales record last month with 331,817 vehicles sold.
Is the EV honeymoon over?
EVs have enjoyed an almost doubling of sales year-on-year in Australia since 2020, however, the number of cars going off the lot dipped 5 per cent in April.
Experts have been saying the sector is struggling to advance beyond the "early adopter phase", pointing towards still emerging charging infrastructure and sliding re-sale values as headwinds.
Recent footage of a "Tesla graveyard" illustrated how the EV landscape is changing for one of the most iconic brands in the market.
Aerial vision showed hundreds of Teslas sitting at a Melbourne dock and many of them didn't have buyers.
"All of a sudden we've got a huge backlog of Teslas that aren't moving...They've just stopped moving," Victorian Transport Association's Peter Anderson told 7News.
Maric said this has been a win for wannabe EV owners because "the only way [manufacturers] can get rid of them is by dropping the prices".
"You're talking about a car that somehow has lost almost $20,000 overnight or over a period of several months for no reason at all other than to sell more stock," he said.
For example, the Nissan Leaf recently went from $50,990 to $39,990 while the Peugeot e-2008 dropped to $39,990 from $59,990.
Should you buy an EV now or wait for another potential price drop?
The CarExpert.com founder shared it could be tempting for Aussies to wait to see if they can get a better deal as this price war continues.
But he said it's a bit of a gamble and you'll have to be content with whatever choice you make.
"Maybe now it's the best time to go and get one because they are pretty cheap for what they are," he explained to Yahoo Finance.
"You want to be comfortable knowing that at the end of your purchase period or at the end of your lease, that you are able to take a hit on the car and don't expect to get what you paid for [it]."
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