A drop in the fuel excise coinciding with the increasing price of a key ingredient in batteries could mean the price of electric vehicles (EVs) will not drop as quickly as renewable energy proponents hope.

Industry advocate Anton Vikstrom said lithium prices had risen in line with EV demand at the same time the federal government made a budget promise to halve the fuel excise for six months.

“We were hoping the cost of batteries would come down but there’s been so much demand for EVs the price of lithium has gone up,” Mr Vikstrom, a director of Good Car Co, said.

“We’re a little bit worried that the price won’t come down quickly enough. However, when petrol prices hit $2.20, that weekend I sold 10 cars.”

Despite the changes, customers are still lining up to test-drive and order a new EV and Tesla’s Model 3 is the fifth-top-selling vehicle overall in Australia, according to the Federal Chamber of Automotive Industries’ VFACTS March report.

It was the first time Tesla released its sales data for comparison in the Australian market.

The brand came in behind Toyota’s HiLux and RAV4, the Mitsubishi Triton and Mazda CX-5.

Electric vehicle figures showed NSW topped the states for EV sales in 2021, moving 7,430 vehicles, ahead of Victoria’s 6,396 and Queensland’s 5,342.

Nationally, sales of EVs have tripled in the past 12 months and Tesla had roughly half the market share in Australia, Mr Vikstrom said.

Supply was also a key obstacle to uptake, with wait times of up to six months on most EV models.

Volvo Cars Brisbane North general manager Neil Marsh and Toowong Mazda sales executive Charles Antiporda both said customers ordering a Volvo XC-40 or Mazda MX-30 now would not see their new cars until September.

Mr Marsh said this year a third of orders were for EVs and “inquiry levels were through the roof”.

“Range and charging are the obvious questions people are asking, but they’re not questions based around fear,” he said.

Mr Broese van Groenou, with daughter Elke, says the number of Queenslanders purchasing an EV is surprisingly high.(Supplied: Anthony Broese van Groenou)

Hurdles to EV uptake

Another Good Car Co director, Anthony Broese van Groenou, said the uptake of EVs in Queensland was “surprisingly high” but it was difficult to tell if the subsidy had made any impact because there was such low supply.

He said metropolitan residents were “really embracing EVs” but there was “still a fair bit to go in regional areas”.

Queensland introduced a $3,000 rebate for new EVs that cost up to $58,000 last month.

The cap on the rebate is lower than in other states, but Transport Minister Mark Bailey said the Queensland government did not want to subsidise people “who can easily afford well-off vehicles”.

She wanted to see EV subsidies closer to $10,000 per car, like some countries in Europe offered, and other policy initiatives to attract EV manufacturers and make prices more affordable.

“Subsidies are a good start but they need to be part of a glossy package enticing those manufacturers to sell cars here,” Ms Roberts said.

“Demand is outstripping supply and Australia is not a priority market because we don’t have policies in place that will drive the scale.”

While Volvo’s $80,000 XC-40 did not attract any government incentive, Mr Marsh said the days of the petrol engine were numbered.

“The reality is it’s the future, and all manufacturers, as time goes by, will have more models in different price brackets,” he said.

“They’re never going to be under $10,000 … but all those gaps in the market will slowly fill.”

Mr Vikstrom agreed and said the country was still “several years away from mass adoption of EVs”, given government policy had only made Australia attractive to manufacturers in the past year.

However, he said Queensland’s network of charging stations “all the way up the east coast” was something the state “should be really proud of”.

Solar Citizens member Stephanie Gray charges a Hyundai electric vehicle. The group wants more government action to increase EV uptake.(Supplied: Solar Citizens)

Mr Broese van Groenou said companies specialising in EV production such as Tesla and BYD would dominate the market in coming years.

Coming from Japan or the United Kingdom, second-hand EVs can start from $18,000, almost half the price of the cheapest new EV in Australia.

Extracted in full from: Demand for electric vehicles rising but battery costs, policy inertia keep prices high – ABC News