Kia Australia has admitted that the enormous demand for electric vehicles in Australia is resulting in a “major problem” as some drivers fortunate to secure an EV are quickly on-selling those cars, profiting on soaring used car values.
The supply of vehicles has been constrained by global supply chain and logistics issues, a shortage of semiconductor chips, soaring demand, and – in the case of Australia – a lack of encouraging EV incentives that is pushing car makers to prioritize other markets.
Drivers wanting to get their hands on models like the award winning Kia EV6 and the Hyundai Ioniq 5 – among others – have been met with disappointment as allocations of 100 or less vehicles at a time have sold out within minutes.
But it would seem that there are a number of buyers whose only intention is to make a profit by selling the vehicle.
See: Used Ioniq 5 EV prices skyrocket, as new car buyers lean toward speed
“The major problem that we’re facing at the moment is the flipping of retail customers what they’re doing with the cars once they bought it,” says Kia Australia chief operating officer Damien Meredith.
“That’s that seems to be a far bigger issue in the market than dealer delivery.”
“We’ve heard stories of people buying a car again, on the east coast, the Sydney Metro and they’re turning up in Western Australia, with a premium of $8,000 to $10,000 on them. So there seems to be a customer flipping exercise,” he said.
Meredith said the issue is not limited to the EV6. For Kia, he says they’ve seen drivers also flipping the Carnival people mover and Sorrento SUV.
For the EV6 though, the matter is further magnified in Australia. Carmakers are finding it even harder to secure supply of EVs because of a decade of anti-EV sentiment from the previous Coalition government, resulting in zero incentives to bring EVs here in any volume.
Meredith thinks the issue will alleviate if demand drops off, but this will likely only to apply to the ICE market.
“I think what’s going to happen is that demand will drop off a little bit supply will increase and therefore we’ll be able to fulfill the back orders that have occurred over the last 18 months,” he said.
But the issue remains for electric vehicles. Although Kia has secured an additional 100 EV6 for Australia, bringing its 2022 total to 600 cars, Meredith says interest in the high-performance EV6 GT variant is very high.
And Kia can’t yet guarantee how many it can get its hands on.
The current wait time is “probably 12 months plus,” he said. “So there is a proportion of the of those sales that are the go-fast EV6 – the GT – which hasn’t been released yet.”
“It’s hard to get a fix on that one in regards to what comes through in the next 12 months.”
The comments, made to automotive media in late May, came as France joins Germany in extending requirements for ownership in order to crack down on dealers who are also making profits on the resale of used EVs.
For Australia however, the issue of EV supply is one of policy. Legislated vehicle emissions standards overseas mean carmakers are not motivated to bring EVs here in large numbers.
Meredith is supportive of the voluntary vehicle emissions limits introduced by the Federal Chamber of Automotive Industries.
“I think the FCAI … is … saying that they want the government to (introduce the emissions measures) …they’ve been doing. We’re doing it anyway,” said Meredith.
However, as The Driven has reported, the FCAI measures are weaker than Europe’s, and many carmakers – including Kia – are not meeting them anyway.
The new Labor government would need to enshrine vehicle emissions standards in law in line with overseas if EV supply, and the issue of flipping new EVs, is to be dealt with.
Kia is also on the cusp of introducing an all-new Kia e-Niro compact SUV that is larger than its predecessor, with a striking new facelift.
Bridie Schmidt is associate editor for The Driven, sister site of Renew Economy. She has been writing about electric vehicles since 2018, and has a keen interest in the role that zero-emissions transport has to play in sustainability. She has participated in podcasts such as Download This Show with Marc Fennell and Shirtloads of Science with Karl Kruszelnicki and is co-organiser of the Northern Rivers Electric Vehicle Forum. Bridie also owns a Tesla Model Y and has it available for hire on evee.com.au.