Cupra remains committed to plug-in hybrids

SPANISH brand Cupra is bullish about the future of plug-in hybrid vehicles in Australia despite the fact that one of the biggest incentives for consumers to shift to PHEV technology is soon to be axed by the federal government.

 

Until the end of March 2025, customers in the market for a plug-in hybrid vehicle can enjoy a Fringe Benefits Tax (FBT) exemption, which on a novated lease for a vehicle up to the Luxury Car Tax (LCT) threshold, could mean a saving of tens of thousands of dollars.

 

The tax break applies to both PHEV models and EVs - but vehicles with a plug and a petrol engine will soon have the benefit axed, as it ends in the first quarter of next year.

 

Some would argue it would stand to reason that having incentives like that for ‘fuel efficient’ vehicles should continue, given the shift towards more electric and electrified vehicles under the looming New Vehicle Emissions Standard (NVES) legislation. And indeed, while there are more PHEVs available today than ever before, there is a concern that once the incentive ends, demand will dry up for the plug-in models, which typically carry a premium of about $15,000 over equivalent non-PHEV options.

Cupra Australia is one brand that has seen a boom in PHEV buying, with the company having sold 1000 plug-in hybrids in its first two years on sale in Australia. Indeed, the figure is even more astounding when you consider that it has sold 6000 vehicles in this market since launch.

 

Ben Wilks, Cupra Australia managing director, said that the company wanted to offer buyers a few choices at identical price points when it initially launched its PHEV line-up - at launch, the Formentor plug-in hybrid was priced identically to the VZx performance petrol model, and also the Born electric hatch.

 

Mr Wilks said that PHEV demand remains strong with the current incentives in place, but the brand is conscious of the upcoming change to the legislation.

 

“We're tracking this, and I think there's a great opportunity obviously for customers to buy now all the incentives exist and that's why we're seeing this kind of heat in the market with novated leasing and people taking advantage of that,” Mr Wilks said.

 

The experience from Europe is that the plug-in hybrid solution, there was, I guess, a dip when the subsidies changed but ultimately customers are choosing also because it's a practical solution for them. So they want to be EV, they want to have that opportunity, but they also need the flexibility (of having a petrol engine for longer trips).

 

“I see the plug-in hybrids as a really good opportunity in Australia, where it answers a question and allows us to run a change management as a society. It's a big step changing all the way to battery electric vehicles. We've got the chance to run BEVs with some great cars like the Tavascan, but we also want to meet Australian customers who want to do the long distances, and I think plug-in hybrids are absolutely perfect for that.

 

“Coming into the new Formentor, I think we’ve got some opportunity with increasing range,” said Mr Wilks, referring to the fact the updated Formentor SUV due in 2025 will have more than 100 kilometres of WLTP rated EV driving range, where the current Formentor PHEV has a smaller battery pack capable of just 58km.

 

“I think that's a big opportunity for that car. And I think that might persuade some new customers as well. So I don't necessarily see a reason to pull back the mix of plug-in hybrid (in Australia for orders moving forward),” said Mr Wilks.

 

“And that's been the experience we've seen in Europe - even as subsidies have gone away there's been a small dip and then that's actually come back as customers are making the choice for those vehicles,” he said.

 

Mr Wilks said the brand is not “actively” agitating for any extension to the PHEV subsidy scheme, and that it is important for consumers and OEMs to be able to plan ahead for what they know is looming on the horizon.

 

“I think it's important as well to have a consistent regulation framework,” Mr Wilks said. “And this is what any company needs to be able to invest in the technologies to come to Australia. So that framework is actually what allows our group to move more quickly. It's what allows us in effect to bring Tavascan in and position it well, and have it quickly here in the market,” he said.

 

When asked if the new models - with bigger battery packs and more EV range - will continue to carry a circa-$15,000 premium over petrol models, Mr Wilks indicated the brand won’t be chopping out cost to make them more appealing on price, even when the incentives end.

 

“The customer makes the choice here - so it provides a practical solution for the customer, in terms of the range that's available, but they also want to move into electrification, I think that they'll make their choice there. So we say that is a pretty practical choice.”

 

Mr Wilks also pointed out that the brand is pushing the current Formentor with the existing PHEV tech, having recently introduced a more highly-specified Tribe Edition variant.

 

“We’ve also got the Tribe Edition plug-in hybrid Formentor, and the concept with that car is very much about the incentives, and particularly when you’re considering novated leasing, it means you can actually be leasing that car for essentially the same price as an entry-level Formentor V,” he said.

 

The list price for the Formentor VZe PHEV is now $64,990 +ORCs for the base model, and $67,990 +ORCs for the more richly-specified Tribe Edition referred to by Mr Wilks, whereas the entry-grade Formentor V has a list price of $51,990 +ORCs. In essence, then, there is $16K of potential savings for savvy buyers who are able to make a PHEV work for their lifestyle.

 

“So really, there are quite a lot of opportunities for value for customers.”

 

Cupra will no doubt be hoping its network expansion to double the number of dealers and service touchpoints over the next 18 months will more than double its sales tally, too.

The brand had initially touted a target of 7000 sales for the 2025 calendar year, but has since stated that it is flexible in its targets, and it will need to be, if 2024’s numbers are anything to go by. For the first six months of 2024, the brand has moved just 1150 units, down 27.5 percent compared to the first six months of last year.