Electric vehicle prices surge as fuel costs soar
The conventional wisdom of the used car market – that depreciation is a relentless force – has been abruptly upended. As petrol prices continue to climb across Australia, secondhand electric vehicles are experiencing an unprecedented price surge, defying the usual downward trajectory of the pre-owned market. This shift signals a fundamental change in consumer behavior, one driven by economic necessity and a growing appetite for sustainable transport.
A demand-driven price spike
Data from MotorMetrics, a Perth-based vehicle analytics firm, reveals a startling trend. While reduced prices are commonplace for used vehicles, the recent upswing in EV values is “very unique,” according to founder Jake Sale. The surge is particularly pronounced for popular models like Tesla’s Model Y, which has seen a price increase of over 6% in just two weeks. The MG4, Polestar 2, and Tesla Model 3 are also experiencing significant price hikes, suggesting dealers anticipate continued demand and are adjusting prices accordingly. MotorMetrics’ analysis indicates that used EV stock is dwindling, further fueling the price escalation.
The contrast is stark when considering petrol and diesel vehicles. Many models are now facing substantial price cuts, with some seeing reductions of up to 20% as consumers rapidly abandon traditional combustion engines. The speed of this change has even surprised ardent EV advocates.
Rental market echoes the trend
The surge in EV demand isn’t limited to outright purchases. Rental companies are also reporting a dramatic increase in bookings. Rob Chan, managing director of Turo Australia, notes a 70% jump in EV and hybrid rentals compared to the same period last year. “This is one of those waves of consumer interest changes that is very unique,” Chan observes, drawing a parallel to the post-pandemic “revenge travel” boom, where pent-up demand led to rapid shifts in consumer behavior. This recent shift is indicative of consumers seizing control by making financially sensible choices.
A nation's slow embrace of electrification
Australia’s journey towards widespread EV adoption has been historically slow, hampered by political inertia and a lack of robust charging infrastructure. However, the current crisis may prove to be the catalyst for a significant acceleration. With EVs now comprising approximately 13% of new car purchases—a figure poised to rise sharply—and Commonwealth Bank data showing a 161% increase in weekly EV loan volume in March alone, the writing is on the wall.
Sydney motorist Har Rai Singh, after experimenting with EV rentals through Turo, exemplifies this shift. “Previously I made the mistake of rushing into buying a combustion engine vehicle,” he explains, now preparing to purchase an EV. The experience of waiting for charging points to become available, and navigating multiple apps, pales in comparison to the rising cost of filling a petrol tank—a cost exceeding $100 in many locations.
Economist Peter Esho, head of Sydney-based Esho Capital, believes this oil shock may be one of the last. “EVs are now a credible option for many passenger vehicles, and this shock is likely to exponentially accelerate adoption, once the dust settles.” As Australians confront the realities of volatile fuel prices, the electric revolution is no longer a distant prospect—it's a rapidly unfolding reality.