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In June, one in four buyers drove an EV out of the showroom, up from almost 8% the same time a year ago, according to industry figures. And Chinese brands are leading the charge. Steve Bragg is a partner at Pitcher Partners. He joined me. Steve Bragg, welcome to the business. Well, thank you for having me. We've seen sales of EVs just balloon. Does it surprise you though that this trend has continued even as fuel prices in Australia have come down from that peak we saw in April? Somewhat. I think the consumers when they're sitting in the EV now, they see the value and the price competitiveness of the product and the tech in the product is very high compared to what they're used to. So, I think the actual
proposition for the consumer is very positive. So, when we look at the latest figures, EV sales are growing really quickly, but Toyota is still leading the pack. Uh but the Chinese EVs like BYD are catching up pretty fast. They are. In fact, BYD only missed Toyota's lead by a few hundred vehicles and they actually led Sorry, BYD led Toyota in Victoria and Queensland, which was quite interesting. Yeah, so how are the Chinese manufacturers doing this? I mean, it's not just BYD. You've got Polestar, which looks after Geely and Zeekr. There's Great Wall Motors. There's MG. There's Jaecoo. There's a whole host of brands flooding the market at the moment.
That's right. There's There's 10 OEMs with 20 plus brands already in Australia, another dozen or so coming. So, Australia's market has over 80 brands. So, it's a very competitive market. How China does this is that they've got a significant overcapacity of production and Australia is a good market for that production. And why? Why is Australia a good market? Well, Australia doesn't have manufacturing and we've got no barrier to entry. So, there's no tariffs in Australia versus other markets, say the US or Europe and in other parts of the world and we also have the inverse credits which are the new vehicle emission schemes credits. So that it's a very attractive market for the Chinese brands. They're about one in three cars these days when it comes to new
vehicles sold especially in June. It's a different situation overseas. I mean obviously Europe has a manufacturing industry to protect and they would like the Chinese manufacturers shut out. The US doesn't want Chinese vehicles there. Why is Australia so open? We don't have manufacturing to protect in Australia. So from a country's perspective and from a consumer's perspective these are great cars that are very affordable. So it's it's an open market. Now you talk about the price point being attractive for consumers. How do the Chinese vehicles compare to the European or the Japanese made vehicles when it comes to price point?
They're in some cases very significantly cheaper. You're 20 30 and plus percent cheaper. So and typically more tech enabled. So from a consumer's point of view it's more car for less money. I mean it sounds good for consumers now and you say there are more brands to come but what confidence can consumers have long term that these brands will remain in Australia and they can keep on being serviced or what have you? It's a key question. When you look at China they have over a hundred brands sorry hundred manufacturers with several hundred brands. So there will be consolidation those brands will consolidate and I think there was a number bandied around about 10
overall manufacturers will remain at the end. So there will be a lot of chaos and a lot of shifting of deck chairs in the meantime. So having those brands stick around is very important. So is there quite a bit of upheaval in the auto industry at the moment as these Chinese brands come in? Is it shaking up the market as you say? A significant amount. It's shaking up the Australian market in particular, as well as Europe. The US is protected at the moment. So, we're definitely seeing a big shift. China has gone from number four, number five global exporter of vehicles to number one in just three years.
Mhm. That's pretty unheard of, isn't it? Yeah, the shift in the speed is never been seen. And they're on track to export 12 million vehicles this year, which is nearly three times the amount of Japan. There was a study done last year. They expected the Chinese penetration to Australia to be 50%. We're already at 30 plus. So, that will continue. Stefan, thank you so much. Thank you very much.
