SYDNEY, March 6 (Reuters) - BYD and other

Chinese automakers are bringing new electric car models in

droves to Australia, a market where they haven't faced trade

barriers and sales have surged due to EV subsidies and tax

benefits as well as high gasoline prices.

Since coming to power in 2022, Prime Minister Anthony

Albanese's government has aggressively promoted EV adoption as

part of the country's plans to cut down on emissions - a change

that came after a decade of weak climate action under

conservative leaders.

That's created a powerful tailwind for electric car demand.

EVs accounted for 7.2% of Australian new car sales in 2023, up

from 3.1% a year earlier.

While Tesla too is greatly benefiting, it is the

Chinese manufacturers in the non-premium end of the market which

pose the biggest threat to incumbent automakers like Toyota ( TM )

and Ford whose wide line-ups of gasoline-engine

cars mean they have more to lose.

Last year, sales for EV giant BYD, which entered the market

in 2022, climbed nearly six times to more than 12,000 vehicles.

The Warren Buffett-backed automaker now has 14% of Australia's

EV market, second to Tesla which has 53%, data from the Federal

Chamber of Automotive Industries shows.

"The opportunity is very clear," said David Smitherman,

chief executive at EVDirect, BYD's distributor in Australia.

"We need to now get into the mainstream market because we've

sold to the early adopters and the passionate EV purchasers."

BYD will add two SUVs and a pickup truck to take its product

line-up in Australia to six this year, Smitherman said. EVDirect

will also open 30 more dealerships in the next 18 months for

total of a 55 and has embarked on fleet sales to companies like

Uber ( UBER ).

Chinese state-owned SAIC Motor will launch three

new models this year under its MG brand, including the MG3

plug-in hybrid and MG Cyberstar electric roadster, taking its

EV/hybrid product line-up in Australia to five.

Incumbent automakers are also looking to up their game.

Ford has two electrified vehicles in the Australian market and

another three on their way, according to a company spokesperson.

Toyota ( TM ) has just launched its first electric car, which joins

its nine hybrids in Australia in offering lower emissions than

comparable gasoline-engine vehicles. It is confident in its

strategy of providing a wide range of hybrids and steadily

increasing battery electric cars, it said.

'GIVING IT A GO'

Although Australia is a relatively small market on a global

scale with 1.2 million cars sold last year, it's highly

attractive to Chinese automakers given that it doesn't have a

car manufacturing industry and is seen as unlikely to introduce

protectionist trade barriers.

Chinese startup Leapmotor, which has partnered

with Stellantis ( STLA ) to expand globally, has designated

Australia as a priority market noting its lack of local car

makers.

In key markets, tensions abound. European authorities have

launched a probe into whether Chinese EV makers unfairly benefit

from state subsidies, while the U.S. has launched an

investigation into whether Chinese-made cars could be used to

spy on Americans.

But relations between Canberra and Beijing have warmed after

years of tensions, with both sides agreeing to turn the page and

expand cooperation. Albanese's government has not given any sign

it is worried about cybersecurity risks posed by Chinese cars.

Australia's Department of Foreign Affairs and Trade declined

to comment on the matter.

To spur electric car demand, the government has introduced

tax exemptions for EV car leasing/purchase agreements available

to some consumers through their employers.

The country's three most populous biggest states - home to

Sydney, Melbourne and Brisbane - have also set goals for EVs to

account for 50% of all new car sales by 2030, giving generous

rebates on EV purchases and investing heavily to build charging

stations.

That was a major motivating factor for Mark Adamson, a

61-year-old TV director in the state of Queensland. He gained

A$6,000 ($3,900) off the A$54,000 retail price of his extended

range BYD Atto 3 SUV through state government rebates and then

BYD offered a discount of roughly A$2,000.

"I figured why not give it a go? It's sort of really worth

doing and I have excess solar at home so I'll mainly charge from

at home, so it makes it a no-brainer in a lot of ways," he said.

Indeed in Queensland, state government rebates alone mean

that an Atto 3 can cost less than Toyota's ( TM ) gasoline-engine RAV4

crossover - a comparable model.

For Sydney union organiser Peter Alley, 63, who drives out

once a week to see family who live 370 km (230 miles) away, it

was the need to cut down on gasoline costs near record highs

that persuaded him to switch from a 2008 Volkswagen diesel van

to an Atto 3.

He now spends about A$20 per week on charging instead of

$130 a week on fuel.

Expectations are high that EV demand will continue to surge,

although forecasts vary. PwC estimates half of Australia's new

car sales will be EVs by 2027. Fitch Ratings predicts 18% by

2032.

($1 = 1.5333 Australian dollars)