Electric Cars Prices Now Match Or Undercut Petrol Cars

If you’ve been holding out on making the switch to an electric vehicle (EV) because of high prices, you might want to take another look. In the past year, we’ve seen a seismic shift in Australia’s EV market, with prices dropping so significantly that some models now rival – or even undercut – their petrol-powered counterparts.

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The Price Wars Begins 'Small'

For years, EVs carried a price premium, largely due to the high cost of batteries - roughly 1/3 of the cost of manufacturing. But now, for the first time, we have reached a critical juncture term 'price parity' mean EV prices are the same or lower than an equivalent petrol car.

The shift started in late 2023 when MG made waves by slashing the price of its MG 4 electric hatchback to an eye-watering $30,990 drive-away for a limited time. That put it in direct competition with popular petrol models like the base-spec Toyota Corolla Ascent Sport ($29,270), Mazda 3 ($31,190), and Hyundai i30 Hatch ($29,000).

BYD is also making a strong push. The company recently introduced “Essential” versions of its Dolphin hatchback and Atto 3 small SUV, with starting prices below $30,000 and $40,000, respectively. It’s clear that manufacturers are no longer just competing with each other – they’re coming for petrol cars too.

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Mid-Size SUVs Join Price Parity

It’s one thing for a small hatchback to be competitively priced, but what about Australia’s favourite segment – the mid-size SUV? Well, it’s happening there too.

Chinese automaker Geely just announced that its EX5 electric SUV will hit Australian shores with a starting price of just $40,990 before on-road costs. That officially makes it the most affordable mid-size electric SUV in the country, even undercutting the Toyota RAV4 Hybrid which costs from $46,732 to $63,621 drive-away.

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EVs Are More Affordable Than You Think

Many electric car models, particularly from Tesla and the Chinese brands are feature and technology packed even with base models.

Whereas with petrol cars, base models often lack the features we actually want. So, when you start climbing up the variant ladder on a petrol car, the price difference between an internal combustion engine (ICE) vehicle and an EV often disappears and sometimes making it more expensive.

Take sedans, for example. A base Tesla Model 3 starts at $54,900 before on-road costs, while the BYD Seal now begins at $46,990. For comparison, a well-specced Toyota Camry Hybrid can easily push past $50,000. Suddenly, that EV doesn’t seem so expensive, does it? This also doesnt take into accounting the substantially lower running costs of an electric car as well as potential tax benefits.

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What’s Next?

In 2023, small SUVs, mid-size SUVs, mid-size sedans, and small hatchbacks made up 38% of Australia’s total vehicle sales – that’s 467,062 cars. With the influx of affordable EVs in these categories, we could see a major shift in buyer habits.

Of course, the EV transition isn’t happening at the same speed across all vehicle segments. If you’re in the market for a large SUV, an off-road 4WD, or a one-tonne ute, electric options are still relatively scarce – and expensive. But given how quickly the market is maturing, it might only be a matter of time before we see all-electric utes and family haulers that don’t require a second mortgage. We are already seeing the BYD Shark 6 PHEV ute become a segment leader since it launched in Australia

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Should You Make the Switch?

With EV prices dropping and fuel costs showing no signs of easing, it’s getting harder to justify sticking with petrol. The reality is, we’re at a tipping point where EVs are no longer just the future – they’re the present.

So, if you’ve been waiting for the right time to switch to an electric vehicle, this might just be it. The price war has begun, and for once, Aussie drivers are the real winners.