A new report has called for greater education and infrastructure around electric vehicles (EVs) as sales in Australia lag behind those in other countries.

The study, undertaken by Nielsen and released in late October, reveals that while electric vehicle sales in Australia reached an all-time high in 2018, the number is still very low compared to other markets. Only 1,352 EVs were sold in Australia compared to 1.2 million in China, 360,000 in the US and 3,682 in New Zealand.

The Electric Vehicle Council revealed in August there were 90 percent more EVs sold in the first half of 2019 compared to the same period in 2018, despite national petrol vehicle sales falling 8.4 percent in the same timeframe.

Business fleets continued to be the largest buyer of EVs in 2018, accounting for 63 percent of total sales. Private purchases made up 33 percent, with government fleets buying only 4 percent.

To better understand what’s holding back electric vehicle sales in Australia, Nielsen interviewed 10 senior automotive marketers, 1,000 Australians, 18+ car owners, and reviewed attitudinal and behavioural views.

The report declared that three issues must be resolved in order to kick the automotive industry into gear regarding EVs. They are:

  • Education and awareness – With only 16 percent of people believing they are adequately informed about electric vehicles, there is a real opportunity for the automotive industry to educate them regarding the unique benefits of electric vehicles. There are mixed results when it comes to awareness of brands offering electric cars – 16 percent of respondents called out Tesla, 11 percent Toyota and 5 percent BMW, Nissan and Hyundai. Interestingly, when asked to select a brand they thought sold electric vehicles in Australia, 23 percent selected brands which don’t and 12 percent reported no manufacturers sell these types of cars in Australia.
  • Perceived value – 79 percent of Australians said price was the key factor to entice them to purchase an electric vehicle. As many as 50 percent said they would pay only $20-$30K. This is a major barrier to sales considering vehicles at the lower end, such as a Hyundai IONIQ retail from $45K plus on road costs, while a Nissan Leaf costs around $50K. It is, therefore, no surprise that luxury car buyers are driving electric vehicle sales, as they can afford to pay the premium.
  • Vehicle range and infrastructure – As many as 47 percent of people believe electric vehicles can only travel 100-300 kms before recharging. Yet, despite most people claiming to drive less than 80kms a day, the dangers of running out of charge on long road trips is a major deterrent to purchase. Furthermore, 77 percent of Australians say the lack of public infrastructure is another key deterrent. This is demonstrated by the fact that there are only 800 charging stations in Australia compared to more than 6,000 petrol stations.

Michael Brown, Automotive Lead, Nielsen, said that while the adoption rate is lower than in other markets, Australians’ concern for the environment was growing rapidly.

“We hope this highlights areas for the government and automotive industry to drive change to better our environment,” he said.

Half the survey respondents said they had no intention to purchase an electric vehicle; however, the report claims there is still an opportunity to ensure marketers are reaching the one-in-three high income responders who said they would.

“Electric vehicle intenders say they want a car that is an expression of themselves and are not brand loyal with car choice. They are strongly influenced by word-of-mouth and they’re 2.5 times more likely to pay for extras, especially when it comes to cars with appealing exterior and interior design. They want a car that has clever storage compartments and good luggage capacity to suit their hobbies, and they prefer AWD to 4WD,” the report says.

EV buyer profiles:

  • Young families and couples
  • Under 45 years old
  • 42 percent use the car to commute to work every day
  • Adventurous and like to socialise
  • Prefer hobbies that require equipment, e.g. cycling, surfing
  • Interests include food, drinks, cooking, cuisine, fashion, shopping, health & fitness
  • Live in metro areas
  • Twice as likely as the general population to be trend setters – have a strong desire to be different from others
    78 percent more likely to drive their kids around every day.

The survey found that, overall, Australians do not feel informed about electric vehicles.

“This provides an opportunity for automotive brands to appeal to the 24 percent of people who said they intend to purchase an electric vehicle,” the report points out.

“Only 16 percent of people believing they are informed, compared with 60 percent believing that they are not, and 24 percent who just aren’t sure.”

Respondents were most aware of Tesla (16 percent) as an EV producer, followed by Toyota (11 percent), and BMW, Nissan and Hyundai (5 percent).

Price the key factor

When asked which factors would influence them to buy an electric vehicle, 79 percent of respondents cited price as the key factor, with up to 50 percent saying they would only pay between $20,000 and $30,000, which is more than 50 percent cheaper than EVs currently at the lower end of the market. Hyundai IONIQ currently retails from $45,000 plus on-road costs, while a Nissan Leaf costs approximately $50,000. At the other end of the scale, the Tesla X retails from $150,000.

Other factors:

  • Infrastructure – 77 percent
  • Charging Cost – 74 percent
  • Safety – 74 percent
  • Driving Range – 70 percent
  • After Sales – 69 percent
  • Performance – 54 percent
  • Resale – 54 percent

“The affordability and availability of cheaper electric vehicles in Australia will no doubt change over time, as technology and economies of scale improve and competition increases,” the report says.

“For instance, a new electric vehicle in the more mature market for electric vehicles of China currently costs less than $20K.”

Range and infrastructure

After price, the next biggest hurdles in the adoption of electric vehicles are perceptions around range and infrastructure. As many as 47 percent of people believe electric vehicles can only travel 100-300 kilometres before recharging. Yet, while most people claim to drive less than 80 kms a day, the dangers of running out of charge on long road trips is a major deterrent to purchase.

Furthermore, more than three-in-four (77 percent) say lack of public infrastructure is another key deterrent. This is demonstrated by the fact that there are only 800 charging stations in Australia compared to over 6,000 petrol stations. Charging times can also vary significantly from 15 minutes using a high-speed charger to 100kw 54 minutes for an 80 percent charge. The most common are 50kw chargers – 80 percent charge in 75 minutes and your normal household socket – 28 hours for 100% charge.

In August this year, the Australian Renewable Energy Agency announced a $15 million investment in infrastructure featuring 42 new sites on highways connecting Adelaide, Melbourne, Canberra, Sydney and Brisbane, as well as new charging stations in Perth, Tasmania and Far North Queensland.

Each of the sites will be powered by renewable energy and feature charging for two cars concurrently.

The report describes the current state of EVs in Australia as a Catch-22 situation.

“The lack of recharging stations and infrastructure discourages electric vehicle buyers. Without consumers’ intention to purchase, the government will not prioritise to build what’s needed. For electric vehicles to take off, either the government must step in and improve the infrastructure or manufacturers have to find new ways to offer alternative ways of recharging. Innovative charging solutions could include wireless charging pads in parking lots, wireless charging under roadways and solar roofs,” the report says.

“Electric vehicle sales will increase, but further education and awareness around the features, performance, safety and technology need to be addressed. Additionally, Government investment in infrastructure is also urgently required. Levels of intention, consideration and purchase will likely rise significantly when incentives are provided to install public and private charging stations, and some form of subsidy or tax credit is offered to reduce purchase cost.”

The report suggested companies incentivise consumers with such innovations as special electric vehicle charging rates that are lower than household electricity costs and/or lower rates during off-peak times.

With countries around the world increasingly setting timeframes for sunsetting internal combustion engines, the report’s authors describe EVs as possibly the biggest game-changer since the introduction of the first automobile itself.

“Investment in research and development must be encouraged to produce the technological innovations to continually improve electric cars,” the report concludes.

“It is evident that Australians feel electric vehicles should reflect their lifestyles, budget, tastes and, most of all, themselves. Therefore, to avoid homogenisation, brands need to find ways to differentiate the performance factors and promote strong unique brand attributes, philosophies and ideologies for this new class of car.”

The federal government is developing the National Electric Vehicle Strategy to be finalised by mid next year to address barriers to EV uptake.

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