A new analysis from Moody’s Analytics has highlighted the current volatility in used electric vehicle (EV) prices in Australia compared to that of internal combustion engine (ICE) models, demonstrating more fallout from the backward policies of the previous decade that have held back the rollout of EVs.
EV sales in Australia have dramatically lagged the rest of the developed world, due in large part to the actively anti-renewable energy and anti-electric vehicle stranglehold of the Liberal-National Coalition between 2013 and 2022.
However, 2023 saw Australia begin to take the first steps towards reversing this trend, with the sale of EVs jumping to 7.2% of total new vehicle sales, an increase of 161% from the previous year.
The consequences of delaying electric vehicle adoption in Australia continues, however, with the lion’s share of available models priced well above what many can afford – although there are now more models priced below $50,000.
Similarly, as highlighted in a new analysis from Moody’s Analytics, a strong Australian used EV market is yet to materialise, partly from the lack of stock, although this may be addressed as the first big EV fleets finishing their leasing cycles.
Moody’s Analytics found that there is significant correlation in used vehicle prices between Australia and the US, which has more than 1.4 million used EVs and PHEVs on the roads, according to one data set.
There has been less volatility in Australian used EV sales due to the fact that the majority of used EVs are in the luxury or near-luxury segment, with these consumers less sensitive to changes in things like fuel prices as they are to employment and house prices.
Moody’s Analytics expects to see greater convergence between how markets such as Australia react to macroeconomic conditions as more mass market EVs reach our shores.
Australia’s delayed adoption of electric vehicles nevertheless leaves the country’s used EV market more susceptible to economic shocks – greater even than that seen in the United States (below):
For example, Moody’s Analytics compared the electric Hyundai Kona with the Hyundai Tucson, a similar size ICE SUV, as well as the electric Nissan Leaf and the ICE Honda Civic.
In both cases the EV model demonstrated greater sensitivity to economic shocks than the comparable ICE model – regardless of whether that was greater appreciation under a more optimistic economic scenario, or greater depreciation under a more pessimistic economic scenario.
In both the optimistic and pessimistic scenarios used by Moody’s Analytics, used electric vehicles in Australia demonstrate greater susceptibility to economic shocks when compared to a more mature market such as the United States, “where EVs are more easily available and the adoption rates are higher.”
Moving forward, Moody’s Analytics concludes that, “as the Australian EV market matures, the oil price forecast will gradually start to play a more crucial role in shaping the forecasts for used-vehicle retention values.
“As the market matures, diversifies, and becomes more accessible, we anticipate that the positive relationship between EV demand and fuel prices will likely become more pronounced as in the U.S. market.”
Joshua S. Hill is a Melbourne-based journalist who has been writing about climate change, clean technology, and electric vehicles for over 15 years. He has been reporting on electric vehicles and clean technologies for Renew Economy and The Driven since 2012. His preferred mode of transport is his feet.