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Kia Australia has acknowledged selling electric cars to the general public – not just early adopters – is a "slow burn", as EV demand cools months before the government begins tracking the CO2 emissions of new vehicles sold.
Car makers have hit the 'limit' of early-adopter customers to buy their electric vehicles (EVs), the boss of Kia Australia has acknowledged, amid cooling demand for battery-powered cars.
Kia Australia CEO Damien Meredith told local media the slowdown is "a struggle", given emissions standards due next year will push car makers to sell more hybrid and electric cars to offset sales of high-emissions vehicles and avoid government fines.
Sales of electric cars are still up 3.1 per cent so far in 2024, but since the middle of the year they are down 12 per cent, and last month recorded a 24 per cent decline.
Market leader Tesla last month recorded a 36 per cent sales slump, while Kia electric-car sales are up 24 per cent – though the EV6 and Niro, its only EVs on sale for the entirety of 2023, are down 5 per cent in 2024.
"It's a tough situation," Meredith told media in regards to the EV slowdown.
"But there's variables in play where we've got to sell more EVs, that's a fact of life with NVES [New Vehicle Efficiency Standard, the government's CO2 emissions rules].
"So maybe other manufacturers are trying to talk up that portion of the market, but the fact of the matter is, we look at it that we've got to basically sell, in percentage terms, double what we're doing at the moment to meet our requirement for NVES.
"And that's our strategy, that's our plan, that's our mix of sales, and that's what we're going to do."
Meredith acknowledged that the market has reached its 'limit' in terms of the number of early adopters buying EVs, and it is now the general public – who are less willing to adopt new technologies – in the hot seat.
"We've definitely reached the early adopter limit, no question. Now we're into the guts of the market and it's a slow burn," he said.
The New Vehicle Efficiency Standard does not force a certain percentage of new-car sales to be electric, but it will require car brands to hit CO2 emissions targets on each vehicle they sell.
Manufacturers are allowed to continue selling high-emissions vehicles – such as diesel utes and 4WDs, including Kia's upcoming Tasman ute – but they must be offset by sales of low- or zero-emissions cars that beat the CO2 targets in order to avoid hefty fines.
Kia is aiming to sell about 10,000 electric vehicles next year – and a similar number of hybrids – while still offering petrol and diesel-only vehicles across small hatchbacks, family SUVs, and utes.
Strict emissions standards proposed in overseas markets – including electric-car mandates in Europe – have been watered down in recent months, inviting discussions something similar could occur locally.
"We can only plan on what's in play at the moment. The legislation takes effect 1 January, the penalties take effect 1 July, and that's what we're planning," Meredith said.
"In between that there's actually a federal election. So those variables, they may flip 180 degrees, who knows."
The top executive added: "We've got a range of cars now that covers basically the spectrum of sales. And with legislation that's in place, and that will be effective from middle of next year, from a penalty point of view, we have to sell X amount of BEVs, all those things and et cetera.
"The mix of cars [is intended] to make sure that we don't have to pay penalties, that we are still priced for the market.
"And that's really, really important to us and that's our expectation. And that comes back to our strategy, that comes back to our operations, and that'll come back to our results."
While electric-car demand has cooled from its heights of 12 months ago, Kia Australia general manager of marketing Dean Norbiato told media interest in the company's latest EV, the EV5 SUV, is strong.
"The results that we're seeing initially in terms of the amount of test drives generated on EV5, the amount of page views on EV5 is far outstripping any other model that we have.
"So whilst there's the doom and gloom on EVs, we feel that we've got a product that's in market that's now resonating as well."
He said: "It's an EV vehicle against a Sportage, a Sorento and a Carnival. So there is interest there if you can get the right product and the right package into market.
"We're following with EV3, which is in the third-biggest category, the small SUV market, behind medium [SUV] and small car."
Meredith added: "We're about strategy, we're about operations, and we're about results. And that's what drives us. We put a good strategy into place, we operate it very well, and that gives us good results."
Alex Misoyannis has been writing about cars since 2017, when he started his own website, Redline. He contributed for Drive in 2018, before joining CarAdvice in 2019, becoming a regular contributing journalist within the news team in 2020. Cars have played a central role throughout Alex’s life, from flicking through car magazines at a young age, to growing up around performance vehicles in a car-loving family. Highly Commended - Young Writer of the Year 2024 (Under 30) Rising Star Journalist, 2024 Winner Scoop of The Year - 2024 Winner
