Chinese auto maker BYD announced the price of its cheapest model to date would cost $23,990 when it arrived later in 2025, undercutting the price of its nearest competitor by $6000.
Automotive experts said the move could inspire another price battle in the Australian market, and could help to boost electric vehicle sales among mainstream buyers after modest growth during 2025.
BYD, which lapped Tesla to become Australia's top-selling electric vehicle brand, will launch the Atto 1 compact car in stores later in 2025, with deliveries expected in early 2026.
The compact, four-seater car will feature a battery range of 220km, as well as fast-charging capability and a 0-100km/h speed of 11.1 seconds.
Its launch would signal price parity for electric and petrol-powered vehicles, BYD Australia chief operating officer Stephen Collins said, and represented the next step in the company's Australian plans.
"Each model reflects our commitment to combining technology, design and efficiency, tailored for local drivers and conditions, reflecting BYD's commitment to making EV ownership attainable for all Australians," he said.
The compact EV will claim the title of cheapest electric vehicle from BYD's own Dolphin model, and will compete with electric cars under $40,000 from GWM, MG, Chery and Hyundai.
Its arrival could inspire another price-cutting war for motorists, Australian Electric Vehicle Association national president Chris Jones said, similar to the battle fought after the MG4's launch in late 2023.
"This will really shake things up," he told AAP.
"Car makers might be sharpening their pencils in earnest."
Many motorists had been waiting for electric vehicle price cuts before making an investment, he said, and small electric cars such as the Mitsubishi I-MiEV and Nissan Leaf had proven popular in the past.
Busy households with more than one car in the garage could find small, cheaper electric models particularly compelling, Dr Jones said, and could accelerate EV adoption.
"There are a lot of people for whom one of their two cars is a runabout - they wouldn't drive it from Melbourne to Sydney but they would drive it across town to drop the kids off at school or at sport," he said.
"If they can swap that vehicle out for an electric model at a reasonable price, it will be very popular."
Electric cars recorded their highest market share to date in the September quarter, according to the Australian Automobile Association, representing 9.7 per cent of new cars sold.
CHEAPEST ELECTRIC VEHICLES IN AUSTRALIA
1. BYD Dolphin Essential: $31,210
2. GWM Ora Lux: $34,990
3. MG4 Excite 51: $37,990
4. Chery E5 Urban: $38,990
5. Hyundai Inster: $39,990
* Drive-away prices
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