Tesla slump and falling prices set to change EV market

A worldwide shake-up in the electric vehicle market, including a Tesla sales slump and policy changes in several countries, could benefit Australian motorists and send prices plummeting.

Drivers could expect electric cars to break the $20,000 barrier this year, for example, and to see a bigger range of battery-powered vehicles, including more electric utes and vans.

Everything Electric global chief executive Dan Caesar issued the predictions on Monday, one month before the launch of the company's third electric vehicle show in Australia and in a year he said would prove a tipping point for the nation.

His forecasts come after Australia recorded significantly lower sales for new electric cars in January, however, following a year of steady growth.

Electric vehicle sales are also tipped to change in other parts of the world, including the United States where President Donald Trump removed a 2030 EV sales target and threatened to impose tariffs on electric cars imported from Canada and Europe.

While the changes could slow sales in the US, Mr Caesar said they could encourage more automotive brands to import electric vehicles to Australia and at lower prices.

Chinese brands, locked out of the US with a 100 per cent tariff introduced in 2024, were already boosting competition and lowering prices in the market.

"For places like Australia and the UK, they actually go up the pecking order from an export point of view for Chinese car makers and that will further drive price reductions," Mr Caesar told AAP.

"We're seeing Chinese brands that have amazing tech but there is a trade-off in that they are new brand and to get people to trust them... they'll have to drop their prices a little."

Electric vehicles launched at the show would include a model from a Chinese brand priced around $20,000, he said, which would break a record in Australia where the cheapest EVs have yet to fall below $30,000.

Competition among electric vehicle brands could also be heightened by the worldwide sales slump for Tesla, he said, which had dominated the industry for several years.

Tesla's sales in Australia have fallen by more than 30 per cent, while other countries have recorded greater falls, such as Spain where sales dropped by 75 per cent.

While the slump is bad news for the pioneering company, Mr Caesar said, it could be an opportunity for new and established brands to find an audience.

"My reading of the data indicates that Tesla does have a perception problem which relates to Elon Musk but I'd like to see how that pans out over the next couple of months," he said.

"Tesla has an incredibly loyal group of car buyers and their retention rate is scarily high so if some of those buyers are in play again, for the new brands that's a whole bunch of consumers."

As many as six new electric vehicle models will be launched at the Sydney Showground car show, held from March 7 and 9, which will feature electric utes, vans, motorcycles and marine vessels, and offer up to 7500 test drives.

More than 240,000 electric vehicles have been sold in Australia since 2011, according to the Electric Vehicle Council, though battery-powered cars represented only 4.4 per cent of new car sales last month.