China turns to Australia to sell its EVs amid rising trade barriers with US, EU

China is on the lookout for fresh opportunities in the export of electric vehicles (EVs) to other parts of the world since there are headwinds in the developed markets such as the US and Europe owing to signs of additional taxes that might erode competitiveness. Australia, however, as we have seen is a different proposition as it still allows Chinese EVs into its market and is therefore a good area for future launches. However, stronger competitors such as MG and BYD are increasing market competitiveness in the Australian EV market which has been influenced by Tesla’s dominance.

MG, a British car brand owned by SAIC, which is affiliated with the CCP, has succeeded with the ZS SUV and EV and is looking to launch the PHEV MG3 and the EV Cyberster some time in 2024. It has also achieved considerable progress with car models such as the Atto 3, Dolphin, and Seal and even surpassed Tesla briefly, albeit incomprehensibly in January of this year. Rivals including XPeng, Geely, Changan, and Leapmotor are also snapping at the heels to jump into the nascent market in Australia for EVs.

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Currently, China dominates the EV manufacturing industry not only through possession of key battery materials but also through competitive and cheap electric cars that enjoy governmental support that has capped the EVs' prices in the country. This has been attributed to the fact that Chinese made EVs are relatively cheap, a consideration that is very important in markets where price plays a critical role.

Some of the strategies that are currently being practiced by the US regulators include restricting Chinese automakers while the EU is contemplating to introducing hefty tariffs proportional to government subsidies on auto exports to its member nations, while on its part, Australia has not shown any sign of excess concern on competition in the auto sector. A representative from Australian-based Federal Chamber of Automotive Industries (FCAI) focused on new opportunities to expand choices and enhance the standing of consumers.

Australian demand for EVs is on the rise, with 98,000 units sold in 2023, comprising over half of the country's EV fleet. Government initiatives such as the National Electric Vehicle Strategy and investments from the Australian Renewable Energy Agency into charging infrastructure further support this growth. However, Scott Dwyer from the University of Technology Sydney warns of potential market stabilisation and emphasises the importance of scaling charging infrastructure to meet future demands.