Can Bezos dethrone Musk with a cheap EV ute
Sam Hawley: It's the battle of the billionaires. Elon Musk's once firm grasp on the EV market seems to be crumbling as Tesla sales slump. So, bring in Jeff Bezos. The Amazon founder wants to give Elon a run for his money, investing in an electric ute. Today, Giles Parkinson, founder and editor of Renew Economy and The Driven, on how it could be a game changer in the market. I'm Sam Hawley on Gadigal Land in Sydney. This is ABC News Daily. Giles, the Amazon founder and billionaire Jeff Bezos, he's decided to take on Elon Musk in the EV market, which is quite frankly a pretty good time, right, because Tesla sales have been tanking.
Giles Parkinson: They have indeed. Tesla sales have been falling around the world, including in Australia. If we go back just about 18 months ago, Tesla had a market share of well over 50%, 68% as recently as January 2023, and that's been declining steadily over the last 18 months. Now, mostly that's because of increased competition, so we've got a lot more EV models in Australia. But there's been issues in the last six months, one with the reputation of Elon Musk and his political posturing and the support for right-wing parties, and then the retooling of the factories for the new model Y. But this move by Jeff Bezos is quite fascinating. It's an electric ute called Slate.
Slate advertisement: This is a Slate. This slate seats two and can carry sheets of plywood. This Slate seats five...
Giles Parkinson: Which ironically is actually an anagram of Tesla.
Sam Hawley: Oh, yes.
Giles Parkinson: Which is a delightful touch.
Sam Hawley: Do you think they did that on purpose?
Giles Parkinson: I think they might have. Who knows? And look, it promises to deliver an electric ute, a low-cost, no-frills ute.
Slate advertisement: We took out everything that wasn't a car.
Slate advertisement: That means no fancy screen, coloured lighting, cooled seats, self-driving, self-parking, automatic cupholders. Yes, that's a thing.
Giles Parkinson: Look, they're saying 27,000 US, which translates to about 43,000 Australian.
Sam Hawley: So, it's quite cheap relatively in the market because the EV trucks or utes, as we like to call them, of course, are pretty expensive, aren't they, right now?
Giles Parkinson: Oh, they're hugely expensive. If you look in Australia, well, we basically don't have any options for fully electric utes in Australia. There's a couple of imported ones, the Ford Lightning, which is about $200,000.In the US, there's about three or four options, like Tesla's Cybertruck, which is about$60,000 to $100,000 US. The Ford Lightning, which is about a similar range, and the Rivian. So, what Bezos is actually offering is less than half the price.So, that's going to be really interesting. And it's gotten 150,000 orders over the last two weeks since it was first unveiled, which shows the interest. Now, it's just a $50 deposit, and it's fully refundable, so it doesn't really translate into sales. But, look, that just shows the potential interest that's out there.
Sam Hawley: It sure is. And the thing is, this Slate truck, it's pretty quirky, isn't it? Just tell me about the design of it.
Giles Parkinson: Well, it's pretty small. So, think about that. You know, in Australia, you see lots of utes around the place now, and they're usually dual cabs. So, you can sit four people or a family. This one's single cab, so just two people. The tray is actually pretty small, just a little over half the size of, say, a Toyota Hilux. So, it's not a big tray. And inside, it's just basically the bare minimum. There's not even any speakers for the sound system. There's no electric digital screen. There's wind-up windows. You can make them electric, but you've got to pay more. There's fabric seats. You can make them nicer, but you've got to pay more. But, look, that's a really interesting concept. Because if you think about cars that are sold now, kind of we try to sell people, car makers are trying to sell you as much as possible. And then they kind of take away a few things to make it sound a bit cheaper for those who can't quite make that price. What Bezos is doing is a bit of a rethink of, well, let's make a car really, really, really, really cheap, make it as basic as possible. And if people want to make it slightly better, then they can pay more and they can add an electric window and nicer seats and a screen and sound system.
Sam Hawley: And also, the thing is you can turn this ute into an SUV. It's like Lego.
Giles Parkinson: Like Lego or a Transformer, I think, as the kids might think. Yeah, it's fascinating, isn't it? You just add things. So, yeah, they're just all talking about this basic product and, yeah, you want to make it into an SUV, we'll just put something on the back of it and get another seat or fold it down or put something else down. And we haven't really seen the details of that. But, yeah, it's a fascinating concept. We're not going to see it actually being made commercially until the end of next year. So, they're kind of teasing it.
Sam Hawley: So, Jeff Bezos, he's backing this idea, this startup, and it really is taking on Musk, is it? Because of that, it's a very different concept in the EV market.
Giles Parkinson: Well, it is. Look, Musk promised for many, many years to sort of deliver a really low-cost EV, and there's a great expectation that he would deliver one as cheap as $25,000 American or $20,000 American. Some even said $15,000 American. He hasn't delivered that. In fact, he hasn't really delivered very much in the last few years. There's the Model 3 and the Model Y. They're great cars, but they're about $40,000 or more US and sort of in the 60s in Australia. And he's done the Cybertruck, but that hasn't gone really well. And this low-cost Tesla has never really emerged. Now, this talk of it being kind of, you know, they're working frantically to produce this, and maybe that's because they've been driven by the competition, this new competition from Bezos. I mean, no other American company has challenged Tesla with a low-cost electric product. Ford and Chrysler and General Motors, sorry, and others have come in, but their cars have been pretty ordinary and expensive. No one's come in and attacked, you know, what you would describe as Tesla's weak spot. A US-made, US-sourced, including the batteries, low-cost EV. Now, whether they can pull it off will be, we'll wait and see, but it's pretty interesting.
Sam Hawley: Okay, well, let's turn to Australia then. We don't know, of course, yet if this slate ute or slate truck will ever actually make it here, but we do love our utes, don't we? So, an EV version, I would think, would be in pretty high demand.
Giles Parkinson: I think it would be in huge demand, but I'm not too sure we're going to go for a small ute. Now, we just seem to be going into this, we've gone into this giganticism. You know, we don't want just a ute now, we want a dual cab ute so we can put the whole family in it. Now, look, a lot of that has been driven by tax advantages. Tradies can go out and get a ute and get big tax advantages and they can basically use it as the family car. So, whether we go for a smaller one, I don't know. What Australia desperately needs is an electric ute, though, that's competitively priced.
Sam Hawley: Yeah, and of course, all those big utes that we see were largely thanks to Scott Morrison, of course. And back in 2019, he did make the point, didn't he, that perhaps EVs really wouldn't be able to do the job that the ute would do. They wouldn't be able to pull a trailer, was his words.
Scott Morrison, fmr Prime Minister: It's not going to tow your trailer, it's not going to tow your boat, it's not going to get you out to your favourite camping spot with your family. Bill Shorten wants to end the weekend when it comes to his policy on electric vehicles, where you've got Australian...
Giles Parkinson: Well, that's what we've proved to be nonsense. You're now seeing EVs coming out which are perfectly capable of pulling boats and doing other things. We have not yet seen electric utes, but we've seen some pretty solid electric cars, you know, with pretty big batteries that can do all that. And I think there's been so many trips around Australia and so many people going on long-distance holidays and things that have sort of proven that. But do you know what? I think we kid ourselves in Australia about how much we like to drive and how much we drive. There's actually some statistics that come out and shows that Australians, on average, drive a lot less than people in Europe and people in the US. Like, on average, it's about 14,000 kilometres a year compared to 18,000 kilometres in Europe and over 20,000 in the US. So, we've kind of convinced ourselves, because we go on a holiday once a year and we try to drive long distance, we've convinced ourselves that we do all these huge thousands of kilometres, but we don't. So, we don't actually need such a big battery or maybe even such a big car, but I guess, you know, consumers are always right.
Sam Hawley: So, Giles, let's then have a quick update on where we're up to overall when it comes to EV sales in Australia. What are we actually seeing?
Giles Parkinson: Well, basically, we're seeing the big fall in Tesla sales. And without that, the EV sales in Australia would have grown slightly over the last year. But because Tesla sales have sort of fallen so dramatically, that's just basically mean that the market's sort of fallen by about 30 or 40 percent. Because Tesla accounted for more than half the market. In April, in the month of April, they accounted for just 8 percent of the market. They only sold 500 vehicles. Now, there's a few reasons for that. There's not just the, you know, the pushback against Musk or the waiting for the new Model Y, which is going to start deliveries this month. There was also logistical issues, boats arriving or not arriving and things like that. So, I don't expect that 8 percent to be repeated again. But it's going to be really interesting to see how the new Model Y goes. I imagine we'll get an initial burst. There'll be several thousand rolling out the door. What happens after that, we shall wait and see. We'd like to think that it would do well because that's important for the whole EV market. There is more competition, but not a lot of it. I mean, we calculated that there's now 100 electric vehicle models in Australia available for choice. That compares to just six, just seven years ago.Now, that's a big increase. But not a lot of them have taken up, like, got a lot of traction. Some of them have done okay for a short period of time. But there's only been a couple of others that have done really, really well. Look, part of it's because there's lots of new brands, particularly from China, and people aren't familiar with them and maybe they're sort of hesitant about a brand they've never heard of. Perhaps they'd be more comfortable with a legacy brand that's gone electric. But the legacy brands aren't in the big rush to offer a lot of affordable electric vehicles yet.
Sam Hawley: Yeah, they're just a bit too expensive for a lot of people still. But we do have this newly re-elected, of course, Labor government that supports EVs. So what should we expect? What will it be doing to encourage EV sales?
Giles Parkinson: So what car makers now have to do is to meet these sort of vehicle emission standards. And some people think they should have been tighter, but they are what they are. They are going to force anyway a lot of those car companies who are not doing very much in EVs to try and get lower polluting cars out the door. Now, some of them will try hybrids, but that won't be enough for some of them. Some of them are going to have to come up with electric cars, and they're going to have to sell those electric cars. I think you're going to see more brands coming out. I think you're going to see more lower cost EVs coming out. I think there's going to be a big rush of new models in the second half of the year and into next year. So I think the policy is probably going to have its desired effect. What we still don't know yet is the consumer response to all that. Are they going to go for that? Because we're not forcing consumers to do it. We're just encouraging car makers to offer these products and to try and sell them.
Sam Hawley: So what do you think? How important would an electric ute, an affordable electric ute, be in convincing people to dump their petrol vehicles in an Australian market?
Giles Parkinson: I think it would be an absolute game changer. I just think it would be the thing that would really change people's minds about EVs in general. Now, we've seen some of these car companies going to plug-in hybrids. The plug-in hybrids actually have a separate motor, separate battery that can go, say, between 50 or 100 kilometres electric only. So if you're just driving around the city, which most people do, you could spend your whole year just driving electric only and just using petrol or diesel on the long distance trip. We saw the release of a plug-in hybrid ute from BYD, and it was reasonably priced, just under $60,000, and that did really well. It was the third best-selling vehicle or third best-selling ute in Australia. It sort of overtook the Isuzu. It's not fully electric, but it's kind of a bit of a stepping stone, I think, for a lot of people. So that shows the potential, I think. But when we will see a fully electric ute priced like that with the same capabilities, there's nothing immediately on the horizon, but we can be hopeful.
Sam Hawley: So how long do you think, though, Giles, until electric utes, fully electric utes, are the norm on our streets?
Giles Parkinson: Well, if you asked me four years ago, I would have said by now, but I was obviously wrong. So I'm hoping really within about two or three years, I think. Well, it's probably going to be two years before we see a couple of models which are competitively priced and have the same sort of capabilities. We're kind of waiting for those legacy companies, the Toyota, the Fords, the Mitsubishis, all those ones to actually sort of make that transition. They don't seem that enthusiastic, so maybe we need sort of consumers to sort of go, hey, guys, we actually want electric. Because, I mean, people's bills for diesel utes and things like that, I mean, they're just huge. I mean, it's just frightening what they're paying each week.
Sam Hawley: Very expensive to fill up the tank. So in the meantime, though, may the best billionaire win, Giles.
Giles Parkinson: Yeah, well, it's going to be fascinating to watch. There'll be no love lost between them, of course. But look, competition's a good thing. If Bezos can deliver and that inspires Tesla to respond with its own lower-cost EV, even if it's not a low-cost ute, or maybe they will, that's good.
Sam Hawley: Giles Parkinson is the founder and editor of Renew Economy and EV website, The Driven. This episode was produced by Sydney Pead. Audio production by Adair Sheppard and Sam Dunn. Our supervising producer is David Coady. I'm Sam Hawley. Thanks for listening.
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"The federal election showed that, despite the Liberals enjoying the significant advantage of the unpopular Allan Labor government, Victorians are deeply sceptical of the party's brand in this state,'' Monash University politics professor Paul Strangio said. "The current saga will only reinforce the public's misgivings about the Liberals being a viable alternative governing party.'' Professor Strangio has been watching Victorian politics for decades, and holds grave fears for the Liberal party and what its dysfunction means for the state. Without robust competition for office, there is a risk of declining standards of government. "Victoria was the bedrock of the post-war Menzies-inspired Liberal Party. He insisted that the party's creed ought not to be in any way reactionary. Today that tradition has been effectively bankrupted," he said. "The party in Victoria has dying roots, is riven by philosophical and personality-based animosities, is short on talent and politically inept." Professor Strangio said there was a serious test for current Opposition Leader Brad Battin in this conflict — the new leader has remained tight-lipped on picking a side, provoking anger that he is not doing more to resolve the issue. "He looks like a bystander; he looks like he is washing his hands of a situation that effectively amounts to a proxy war over the direction of his party. It's not tenable for a leader to remain publicly mute in these circumstances,'' Professor Strangio said. "It raises the issue of what kind of premier he would make. How much authority would he actually wield over his party? Who is really in control?" Professor Strangio said the fascination with culture wars and the promotion of deeply socially conservative policies is a fundamental miscalculation by some Liberals. It puts them out of alignment with the sensibility of the majority of Victorians. Equally misguided is the idea that these types of concerns and attitudes resonate with outer suburban voters. "'These are demographically complex, socially and culturally-diverse communities. Aggressive conservatism doesn't speak to them, if anything, it alienates them," he said. Professor Strangio said with its record of chronic underperformance, there was a serious case for some form of federal intervention in the Victorian Liberal Party. But those in the party say an intervention is too difficult and that it would not solve the biggest issue — the personal hostility between state MPs. Finding a compromise is proving difficult. A GoFundMe for Mr Pesutto has raised $212,562 and has now been closed as he works to secure a loan to cover the costs. Other major donations are understood to have been committed privately. A plan has been cooked up for the Liberal party or one of its fundraising arms to provide a loan to him to cover the costs. At the time of writing, a proposal has not been put to the administrative committee who will decide. Mr Battin is a member of the panel along with elected volunteers from the membership. He's now understood to be supportive of some rescue package. Anything to avoid a messy by-election that could present questions for his leadership. There has been some reticence from the party to get involved. When Mr Pesutto first moved on Ms Deeming, the admin wing of the party was essentially told to butt out, as it was a matter for the party room. It's why there's some reluctance, and in some members, complete resistance to helping out Mr Pesutto. "He was pig-headed then, and now he wants our help,'' one senior figure said. The personal animosity is party-wide, not just confined to the MPs. Mr Battin did not create the mess but has to deal with it. It's distracting him from his work of trying to end 12 years in the political wilderness for the Victorian opposition. He wants it resolved and is quietly trying to do so, although publicly he is staying tight-lipped. Even if he can resolve this matter, the challenge remains to try and unify a fractured party room. If Mr Pesutto is bailed out by the party, it will only incense Ms Deeming and her group. But if Mr Pesutto is bankrupted, the party will be just as angry. And there is Ms Deeming's upper house preselection. Among the MPs and party figures canvassed for this story was a view that Ms Deeming would lose preselection for next year's election. If that occurs, you can bet the party infighting will ramp up again. And that will be even closer to polling day.
