Electric and hybrids shine amid gloom of faltering fossil-fuel car sales

Electric and hybrid vehicles continue to drive change in the slumping auto market in Australia, pushing a minor uptick in auto sales in June compared to previous months when sales were hit by the Coronavirus pandemic.

Overall sales in June were nearly double that of May, but compared to the same month last year are still down more than six per cent, and 20 per cent in year to date, even as sales of new zero and low emission vehicles continued to climb.

The Australian auto market has now been in decline for more than two years, with the only bright spot being the surge in zero and low emissions market, albeit from a low base, and the growing preference of hybrids for some key models.

Petrol vehicle sales were down 87,000 for the first half of 2020 compared to the same period in 2019, and diesel vehicles down 36,000 according to data released today by the Federal Chamber of Automotive Industries (FCAI).

Electric and plug-in hybrid sales (which are grouped together by the FCAI’s Vfacts) and hybrid sales were up, with almost 11,000 more hybrid sales (23,235 YTD) and nearly 1,600 more electric/PHEV sales than the first half of 2019, despite the massive, drop in auto sales over the past three months.

These figures do not include Tesla sales, which amounted to another 1,300 sales in the first six months, according to industry estimates.

EV and PHEV sales were up in all segments except for commercial SUVs, following a trend we’ve seen for a few months now. Compared to the previous year, the greatest jump was seen in the private passenger segment, followed by light commercial vehicles.

FCAI chief Tony Weber noted the dramatic impact the Covid-19 crisis has had on the industry, but it is disappointing to note that Weber again made no mention of the growing uptake of hybrid and electric cars.

“Some states have seen the easing of COVID-19 restrictions, and this has increased floor traffic through dealerships,” Weber said in a statement.

Weber noted the federal government’s instant asset write-off scheme is likely driving the increase in auto sales, but petrol and diesel sales were still down in all non-private segments. Interestingly, it was hybrids that drove the non-private SUV segment, and EV/PHEVs that drove the non-private passenger segment.

“The extension of the Government’s instant asset write-off scheme has also been a positive influence.  This program allows businesses to bring forward tax deductions for eligible expenditure,” said Weber.

There are currently 12 all-electric passenger and SUV models available for order in Australia, and this month the Audi e-tron will be added to the list, and the Porsche Taycan, the Mini Electric Hatch and MG ZS EV still in the waiting wings.

One interesting move in EV sales has been the performance of the Mercedes-Benz EQC, which has overtaken the Tesla Model X, although it should be noted that no Model Xs have been shipped to Australia in the past four months.

Hyundai EV sales of both the Kona and Ioniq, and Nissan’s 2018 Leaf continue to push forward. Notably, Hyundai reports that electric sales of the Ioniq are still more than double that of the PHEV and hybrid drivetrains.

It’s all very promising, but as noted by Tesla chair Robyn Denholm in a recent webinar reported by The Driven on Thursday, there remains a great deal of policy uncertainty for EV makers in Australia who want to put the case forward to overseas headquarters to bring more electric models to Australia.

The luxury car tax threshold for low and zero emissions vehicles has quietly been lifted at a higher rate than for high emissions vehicles for the first time in a decade, which will go some way to making a wider range of electric vehicles somewhat more affordable.

But in contrast to this, there is still a push in some quarters for a form of a road user tax to be applied for electric vehicles in NSW, even though the overwhelming cause of a slump in fuel excise revenues has been caused by the shift to hybrids and the increasing fuel efficiency of many petrol and diesel engines.

As Denholm noted on Thursday, imposing road user charges on drivers who are wanting to make the shift to a form of transport that has the potential to save millions in terms of climate change and health costs is counterproductive.

“It is actually denying consumers the opportunity to participate in new technology,” Denholm said.

Denholm, who has three decades of corporate experience in technology and automotive industries, also underlined the importance of government playing its role to provide certainty for car makers to accelerate the adoption of zero emissions transport.

A national electric vehicle strategy that was expected to be released in mid-2020 by minister for energy and emissions reduction Angus Taylor that would outline a technology-based approach (read: infrastructure) has now been delayed until the end of 2020.