Is this the biggest barrier to electric car adoption? Why price cuts to the Tesla Model Y, Tesla Model 3, Ford Mustang Mach-E, GWM Ora and Peugeot e-2008 show prices are too high | Opinion

Change is in the air.

Carmakers are starting to realise sky high electric car prices won’t cut it in the long term.

Demand is dwindling in the giant European and US markets as the cohort of early adopters are now spoken for and it is becoming more challenging to tempt buyers away from cheaper petrol and hybrid vehicles.

In the past few months several car makers have slashed prices on their slow - and not so slow - selling electric cars in Australia.

Peugeot cut the price of its e-2008 small electric SUV by more than $20,000 to $39,990 drive-away. Only a few days later the company had sold all its remaining stock and the car won’t be on sale until the updated version arrives early next year.

Tesla has slashed the price of its Model Y SUV and Model 3 sedan several times since the start of April to $55,900 (before on-road costs) and $54,900 respectively.

An entry-level Model Y was $65,400, and the same Model 3 was $61,900 - meaning a $9,500 discount on the Model Y and a $7000 saving on the Model 3.

That’s a big discount on the two best selling electric cars in Australia by a wide margin.

Nissan has axed about $16,000 off the price of the slow-selling Leaf, which now starts at $39,990 drive-away with the longer range e+ model $49,990 drive-away.

Ford has cut the price of the Mach-E twice in the past six months.

Ford announced on Friday cuts between $7000 and $8000 of its Mustang Mach-E electric SUV range.

It now starts at $64,990 for the base Select grade, $79,990 for the Premium variant and $97,990 for the potent GT version.

Ford already lopped up to $7000 off the Mach-E before it went on sale in December last year.

Ford Australia boss Andrew Birkic said: “These price reductions offer even greater value to our customers and it makes these great vehicles an option for more people.”

Subaru made a similar move with its Solterra, knocking up to $8000 off the price before a vehicle was even delivered to customers.

GWM has discounted its Ora small electric hatchback and Renault has generous deals for its Megane E-Tech EV, too.

These EV discounts are no longer an isolated incident and are a direct response to cooling customer demand and increasing competition.

Luxury carmakers have been struggling to sell their EVs in big numbers too compared to their petrol-powered equivalents.

These trends show that outside of early adopters consumers are finding it hard to justify spending the circa-$20,000 price premium for an EV compared to a petrol or even hybrid models.

The Peugeot e-2008 sold out in a few days after a monster price cut.

Sales of EVs were down five per cent in April, but are up 32 per cent for the year. That sounds good until you factor in EV sales were up 130 per cent in 2023.

By comparison hybrid sales are up more than 130 per cent this year. Car makers such as Hyundai, Kia and Nissan are adding more petrol-electric versions of their cars to feed this demand.

Most states wound back their EV incentives at the start of this year but the Federal Government's very generous FBT exemption on EVs should be spurring higher demand.

Carmakers finding it hard to move their EVs now are in for a tough time as a wave of Chinese electric brands are set to wash over our roads in the next 12 months.

These include GAC, Leapmotor, Smart, Xpeng, Zeekr and more.

China has the tech and manufacturing advantage to undercut conventional cars brands. 

China is the leading producer of batteries and is the closest to bringing the game-changing solid-state batteries to market.

These solid-state packs are considered the silver bullet for mass EV adoption. They are smaller, lighter, more energy dense, faster charging and safer than today’s lithium-ion units.

They have the capacity to make their cars cheaper than others and they have insanely short life cycles, meaning they can upgrade and improve their vehicles in much shorter time than legacy carmakers.

Help is on the way, though.

Established carmakers are now preparing to roll out an array of cheap, small EVs targeted at the everyday driver.

Volkswagen is the latest brand to confirm it’ll build a circa-$30,000 EV with its coming ID.1 hatchback.

That price puts it in the same ballpark as an entry-level Mazda3 or a fully-loaded Mazda2.

Jeep and Citroen are rolling out little EVs at a similar price and Kia will launch the EV3 small electric SUV in Australia next month.

Kia and Hyundai both have mini EV SUVs in the works with the EV2 and Casper.

These kind of cars will have a knock-on effect and will lead to cheaper used electric cars too, which will again spread the zero-emissions motoring to new sectors.

The people have spoken: the only true barrier to EV adoption is the high prices but carmakers are listening and help is on the way.