Current price caps for EV discounts are not representative of what most consumers are buying, says fledgling EV brand
The head of Australia’s newest electric vehicle brand, Polestar, has called on state governments to lift their price caps for recently-introduced EV rebates, arguing that current thresholds are not motivating enough buyers.
As it stands, every Australian state and territory now offers EV purchasers either a rebate of at least $3000, stamp duty exemption or reduced registration in a bid to encourage the take-up of zero-emissions vehicle. The federal government, meanwhile, continues to offer nothing to EV buyers.
However, closer inspection reveals some significant caveats if your EV of choice is wearing a European badge – or even a Korean one like the award-winning Hyundai IONIQ 5, which is currently priced from $71,900.
In NSW, for instance, a price ceiling of $68,750 applies in order to receive a $3000 rebate, meaning the majority of new EVs on the market do not meet the criteria because they’re too expensive.
Polestar Australia managing director Samantha Johnson this week called on state and territory governments to rethink their rebates in order to speed up EV adoption.
“They do need revisiting, because if you’re talking about bringing people Australia-wide to a more sustainable mobility, when you cut out the premium end that’s a huge amount of the market that you’re not really motivating,” Johnson told carsales.
“If governments do bring up the incentives to match [what’s available on the market], then they’re going to bring on the move to sustainable mobility a lot faster.
“Polestar supports well thought-out policies by governments, so it’s really the measure of what’s the best way to motivate people to sustainable mobility.”
In a briefing with Australian journalists in Sydney on Wednesday, Polestar’s head of global sales Mike Whittington echoed Johnson’s comments, drawing on knowledge from mature EV markets including Norway.
“We welcome any support, whether it’s federal incentives or consumer offers because that’s driving a move towards electrification. We welcome that and do our fair share of lobbying to move that forward.”
Australia is projected to be Polestar’s second-largest right-hand drive market globally behind the UK.
Whittington believes EV uptake will ultimately accelerate with or without incentives, such are the ownership and environmental benefits. But in the interim, he agrees more can be done locally.
“If I look at some of the dynamics in the Australian market, it’s similar to some of the other markets. Some are more advanced in how they’re pushing electrification, and Norway is a great example – it’s 80 per cent of the market now,” he said.
“Others are still catching up and learning. I’ve read some of the EV strategic direction for Australia and I think it’s strong and moving in the right direction.
“Personally, I’d rather see everything come a bit more quickly, but it looks like a positive sign and it’s a very important market for us. We see a lot of growth potential in the market here.”
While Polestar criticised respective government rebate thresholds, in recent weeks it upped the sticker prices for MY23 versions of its sole Polestar 2 model – by $4000 for the base Standard Range Single Motor variant, to $63,900 plus on-road costs.
Citing increased production costs, Polestar increased prices by $3500 for both upstream versions of the mid-size electric fastback. The mid-range Polestar 2 Long Range Single Motor now costs $68,400 plus ORCs – just under the rebate cap in Australia’s most populous state – while buyers of the flagship Polestar 2 Long Range Dual Motor ($73,400 plus ORCs) miss out on NSW’s EV subsidy.
While some states offer larger $3500 subsidies, Queensland’s EV discount threshold is lower than NSW’s at just $58,000 and Western Australia’s the highest at $70,000.
“We’ve already taken some pricing action and we’ve been looking at that across markets. We’re seeing competitors are starting to move to reflect increased costs,” said Whittington.
“I would argue that EVs are already affordable when you look at the total cost of ownership, the consumer offers and the incentives.
“We’ve seen pricing adjustments across many automotive products – it’s not just EVs.”
Johnson said Polestar Australia would carefully evaluate the broader landscape before passing on any additional price hikes. She said customers were so far understanding of the reality of increased production costs being passed on.
“We try to be as stable as we can considering residual values and other considerations,” she said.
“We don’t have control over what those costs are so we’ll try to maintain that as best we can, but we can’t say what the future will hold.”
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Keyword: Polestar calls for higher EV rebate thresholds