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Two Chinese car manufacturers have sparked an electric vehicle (EV) price war in Australia with their plans to roll out “the most affordable” electric car on the market this week.
On June 19, MG Motor, which Chinese automaker SAIC Motor owns, announced the release of an entry-level model for its MG4 electric SUV at $38,990 (US$26,500), a drop of $6,000 compared to the previous price.
This will be the first EV to be sold in Australia for under $40,000.
MG Motor Australia CEO Peter Ciao said his company’s move was to facilitate the adoption of EVs among Australians under current challenging economic conditions.
“I know they are feeling those rising pressures at supermarkets when they’re buying fuel when they’re paying their energy bills,” he said in comments obtained by AAP.
“There is no doubt that the cost of living is the number one issue right now for Australians, and we’re trying our best to help by making EV affordable with the release of MG4 at under $38,990 plus on-road costs.”
Due to the price cut, the MG4 base model has a reduced battery capacity, with a range of 350 kilometres, which is comparable to low-end EV models from other manufacturers.
In addition, MG Motor will stop the production of ZS EV Excite, an entry-level electric SUV, to pave the way for MG4 in Australia.
BYD’s Dolphin Launch
Meanwhile, MG’s rival BYD is preparing to launch what the company calls Australia’s “most affordable, high-quality EV” on the Gold Coast on June 22.
The Chinese automaker will release BYD Dolphin, an electric hatchback with an estimated range of over 420 kilometres.
While BYD Dolphin was sold in New Zealand earlier this month with an entry price of around $45,000, car experts have expected the Australian model to fall somewhere between $30,000 and $40,000.
Australian Electric Vehicle Association president Chris Jones believed Australian consumers would benefit from the competition between the two EV manufacturers.
“This means that BYD will have to sharpen their pencil,” he said.
“These companies know that Australian demand for EVs is not going away.”
He also noted that it was not coincident that Chinese automakers were leading the price trend in Australia.
“The Chinese manufacturers have the volume on their side,” Jones said.
“The vast majority of products they make get sold locally into the Chinese market, and that’s enormous. So they’ve got numbers to make low-margin vehicles viable.”
Meanwhile, Chris King, the CEO of rideshare subscription firm Splend, said Australia had not seen much drop in EV prices and that the country had missed out on the mass-market models and growing competition compared to other nations.
“The way the EV space has developed–they’ve started with the more premium segment, and they’re moving down to more cost-effective segments as production costs come down and they reach scale,” he said.
“We’ve seen (cheaper EVs) in London for more than three years now, and they’re the same kind of cars that we’ll see in Australia.”
Huge Batter Waste Problem
MG Motor’s announcement comes as EV experts have forecasted that Australia will face a considerable battery waste problem in the next decade.
According to the Battery Stewardship Council, the volume of EV waste could reach 30,000 tonnes by 2030 before soaring to 1.6 million tonnes by 2050 as Australia seeks to achieve net zero emissions.
However, the country does not have the necessary industrial capacity, standards and regulations to recycle battery waste properly.
As such, many experts have called on the Australian government to establish a stewardship program where consumers must pay extra costs for the safe disposal of EV batteries.