On March 6, according to Caixin, Chinese New Energy vehicle companies led by BYD are increasingly setting their sights on the Australian market.
While the electric car demand is declining in major developed economies like Europe and the United States, the electric vehicle market in Australia remains hot. Generous subsidies, tax incentives from the Australian government, coupled with high fuel prices, are driving a sustained surge in local electric vehicle sales.
What makes this opportunity particularly rare for the influx of Chinese automakers is the absence of any trade barriers or restrictions in this developed market. Since coming into office in 2022, the current Australian government led by Prime Minister Anthony Albanese has actively promoted the development of the electric vehicle market as part of the country's emission reduction plan—a significant shift in climate policy.
Over the past decade, the previous conservative Australian government has been criticized for its inadequate action on climate change. This has created a strong tailwind for electric vehicles in the Australian market. According to data from the Federal Chamber of Automotive Industries, electric vehicles accounted for 7.2% of new car sales in Australia in 2023, significantly higher than the previous year's 3.1%.
Behind this trend, Chinese New Energy vehicle companies, led by BYD, are gradually becoming an increasingly undeniable force in the local market.
Chinese Automakers "Blossoming" in the Australian Market
Despite Tesla benefiting from the electric vehicle boom in Australia, local industry experts suggest that traditional automakers like Toyota and Ford face their most significant threat in the Australian market from Chinese New Energy vehicle companies, especially those predominantly targeting the non-luxury segments.
According to the Federal Chamber of Automotive Industries' statistics, Chinese electric vehicle giant BYD achieved over 12,000 units in sales in the Australian market last year. BYD secured a 14% market share in the Australian electric vehicle market, ranking second only to Tesla's 53%.
The momentum of BYD's soaring sales in the Australian market continues into the first two months of this year. According to data from the Federal Chamber of Automotive Industries, in January, BYD's electric vehicle sales in the Australian market (1,310 units) surpassed Tesla's (1,107 units) for the first time.
While the shift in rankings this month primarily stems from Tesla grappling with rear seatbelt issues that have delayed local deliveries, BYD's solid sales performance is becoming evident. The latest data released this Tuesday further shows that BYD's sales in the Australian market in February rose to 1,549 units, marking a 101.2% increase compared to the same period last year.
David Smitherman, CEO of BYD’s Australian dealer EVDirect, commented, “The opportunity right now is crystal clear. It’s time for us to break into the mainstream market.”
According to Smitherman, BYD plans to introduce two new SUV models and a pickup truck in Australia this year, expanding its product lineup in the country to six. EVDirect also aims to open an additional 30 dealerships over the next 18 months, bringing the total to 55, and has already started bulk sales to companies like Uber.
SAIC Motor is also launching three new models under its MG brand in Australia this year, including a hybrid version of the MG3 and the MG Cyberstar electric convertible sports car, expanding its lineup of electric/hybrid vehicles in Australia to five.
The Chinese startup Leapmotor announced a partnership with Stellantis last quarter to expand globally, with Australia prioritized as a key market.
Is Australia becoming a hot spot?
With just 1.2 million car sales last year, Australia is a relatively small market on a global scale. However, the absence of a local car manufacturing industry and the unlikely introduction of trade protectionism make it an attractive destination for Chinese new energy vehicle companies eager to expand overseas.
To stimulate demand for electric vehicles, the Australian government has previously exempted certain consumers from taxes through employer-signed electric vehicle leasing/purchasing agreements.
Sydney, Melbourne, and Brisbane, Australia’s three most populous cities, have set a goal for electric vehicles to make up 50% of new car sales by 2030. They offer generous tax incentives for purchasing electric vehicles and are investing heavily in building charging stations.
Mark Adamson, a 61-year-old resident of Queensland, Australia, mentioned that these incentives were a key reason for his decision to purchase a BYD electric vehicle.
He bought the BYD Atto 3 long-range SUV (known domestically as Yuan Plus) for 54,000 Australian dollars (about 253,000 RMB). State government tax rebates granted him a 6,000 Australian dollar discount (about 28,000 RMB), and BYD offered an additional discount of around 2,000 Australian dollars (about 9,400 RMB).
“Why not give it a shot? It’s definitely worth trying, and I have excess solar power at home, so I mainly charge there. In many ways, it’s effortlessly beneficial,” he said.
In Queensland, the state government's rebate alone makes the Atto 3 cheaper than the Toyota RAV4 crossover (a similar vehicle category).
For 63-year-old Sydney union organizer Peter Alley, who drives out once a week to visit family 370 kilometers away, the switch from a 2008 Volkswagen diesel van to the Atto 3 was driven by the need to save on local gasoline costs, currently near historical highs.
He noted that his weekly charging costs are now about 20 Australian dollars, compared to the 130 Australian dollars he used to spend on fuel every week.
PricewaterhouseCoopers predicts that by 2027, half of all new car sales in Australia will be electric vehicles.
Given that the penetration of new energy vehicles in the Australian market is still far from comparable to that in China, the EU, or even Southeast Asia, for Chinese new energy vehicle companies, Australia undeniably represents a new blue ocean filled with opportunities.
