EVs reach cost parity with petrol cars

BYD has just launched the cheapest EV in Australia --- and it costs the same as comparable petrol cars, even before big tax concessions.




From Drive

Two Chinese automotive giants have sparked a price war aiming to undercut each other to earn the title of Australia's cheapest electric car.

Three days after Chinese brand MG announced a new electric car – the MG 4 – priced from $38,990 before on-road costs, arch-rival BYD has announced its new model – the BYD Dolphin – will start from $38,890 before on-road costs.

When they arrive in showrooms later this year, both vehicles will cost close to or in excess of $40,000 drive-away once registration fees and other charges are added.

The distributor for BYD vehicles in Australia today said the $100 difference in RRP between the two electric cars was a coincidence and the price was "locked in months ago."

Orders for the Dolphin – the second mass-produced model from the Chinese electric-car giant in Australia – opened at 8:00pm AEST on 22 June 2023.

All five electric cars available in Australia for less than $50,000 made in China by three local car brands – MG, BYD and GWM Haval.

There are three model grades: the entry-level Dynamic and the long-range Premium, both due this year, plus the performance-oriented Sport due next year.

About the same size as a Toyota Corolla or Hyundai i30, the Dolphin is almost $10,000 cheaper than BYD's other vehicle on sale in Australia, the $48,011 plus on-road costs Atto 3 small SUV.

It also undercuts the GWM Ora Standard Range from China ($43,990) – and is priced in line with popular petrol-powered hatchbacks including the Toyota Corolla ZR Hybrid ($39,100), Hyundai i30 N Line Premium ($37,300) and Mazda 3 G25 GT ($38,420). All prices listed are before on-road costs.

The entry-level Dolphin is powered by a 70kW/180Nm electric motor and a 44.9kWh battery pack, good for 340km of claimed driving range in European WLTP lab testing, and zero to 100km/h acceleration in a claimed 12.3 seconds.

A more powerful Premium version is available with a 150kW/310Nm electric motor and 60.48kWh battery good for 427km of estimated WLTP range.

There are cheaper petrol cars.  For example, you can buy the Kia Picante automatic for about $18K.

But EVs are exempt from fringe benefit tax (FBT), a tax which applies if your employer provides you with a car as part of your salary package.    This means that if your employer provides you with an EV, your taxable salary is reduced.  You save whatever your top marginal tax rate is.  For many people, that's 32.5%.  But you also save on GST (general sales tax).  It is added to your monthly novated lease cost, but your employer can claim it back off its own GST.  GST is 10%.    So that means that the effective cost of a BYD Dolphin bought through your employer is about $23,000.  Given that the tiniest petrol car costs $18,000 .....  

But wait, what about people who aren't paying income tax?  Well, the way the FBT car deals work is that after three to five years you have the option of buying the car at a reduced value, or of getting a new car on a new lease, in which case, your employer will sell the car.  So the supply of second hand EVs will jump in two years (this FBT concession was started on July 1st last year), as fringe benefit cars get shifted into the second hand car market.  

Of course, this isn't the end of the decline in the price of EVs --- battery costs will go on falling.  But it surely marks the beginning of the end for petrol cars in Australia.   Oil companies, garages, legacy car dealers, all will face falling revenue and a declining market share.  Toyota, for example, doesn't even sell EVs in Australia, yet.   Most service stations don't have EV chargers on the premises, even though their higher margin business is the groceries and stuff they sell in their shops, not the petrol on their forecourts.  They're not paying attention, and it will be very costly for them.