Why Cadillac is yet another luxury brand to slash EV prices

The Cadillac Lyriq is now priced $32,000 lower than it was when the large electric SUV was launched in Australia last year, making it one of the latest premium-branded electric vehicles (EVs) to receive a significant price cut.

The list price of the Lyriq Sport and Lyriq Luxury was reduced earlier this year to $90,000 before on-road costs, with a $95,000 nationwide drive-away offer currently available until June 30, 2026.

This comes despite rising EV sales in Australia over recent months due to higher fuel prices, and after Cadillac had offered various deals on the Lyriq since commencing deliveries early in 2025, including finance offers and discounted pricing.

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“The market moved significantly from when we launched to where we are now, both from a price and a competitive standpoint – new brands have come on,” General Motors Australia and New Zealand (GM ANZ) managing director Jess Bala told CarExpert at the launch of the new Cadillac Optiq and Vistiq.

While Ms Bala didn’t name any of these brands, Chinese brand Zeekr stands out. Though it commenced local deliveries late in 2024, shortly before Cadillac, its sales kicked into overdrive late last year with the arrival of the mid-size 7X electric SUV. Zeekr pitches itself as a premium brand, but the 7X undercuts the top-selling Tesla Model Y – not to mention the new Cadillac Optiq.

“Anytime we go to market with anything, we do a lot of work to set what that price is, we look at what the competition’s doing, our forecast, our volume expectations, how many we want to sell, all those sorts of things,” said Ms Bala.

“When we launched, we wholeheartedly believed that that price was right, and then to the team’s credit, the market shifted and we shifted along with it.”

Cadillac initially announced a price of $117,000 before on-road costs for the Lyriq in 2024, but it increased this to $122,000 plus on-roads in 2025. Despite this, it still undercut rivals like the Audi Q8 e-tron, BMW iX and Mercedes-Benz EQE SUV at the time.

Ms Bala declined to share what Cadillac’s volume targets are for our market. The brand also doesn’t report its sales in monthly VFACTS industry reports, unlike GM Specialty Vehicles which does this for its range of Chevrolet and GMC models.

“We have our own internal targets. We want to stay relevant to the right customers in that luxury space, so to be successful and sort of continue to set ourselves up long-term, we had to do the right thing and pivot,” she said.

The adjusted list price of the Lyriq brings it under the current Luxury Car Tax (LCT) threshold for fuel-efficient vehicles of $91,387 (rising to $91,667 in the new financial year), which therefore makes it eligible for Fringe Benefits Tax (FBT) exemptions.

Many luxury brands have been broadening their offerings below the LCT threshold to appeal to customers with salary packaging arrangements, as with new EVs below this price point there’s no FBT to pay.

This Australian Government scheme, called the Electric Car Discount, is continuing in full until March 31, 2027.

After April 1, 2027, the full FBT exemption will only apply for vehicles costing $75,000 or less. Vehicles above this price point but below the LCT threshold will instead be eligible only for a 25 per cent discount on payable FBT.

“One of the things that we’ve been able to establish over this first 18 months is what is the right price, and that’s fluctuated across the industry,” said GM ANZ marketing director Heath Walker.

“You only have to look at the announcement BMW has made today around where their price points are going, so we’re not the only one that’s watching this holistically.”

Mr Walker was referring to the announcement of an entry-level ‘40’ version of the new-generation BMW iX3 mid-size electric SUV, priced at $89,900 before on-roads – sliding under the LCT threshold, and $20,000 less than the iX3 50 xDrive.

The Lyriq’s price cut hasn’t even been the largest in the luxury space.

Lexus slashed prices of its RZ by up to $42,059 earlier this year, and that was for a significantly updated model to boot.

As with the Lyriq and the iX3, the RZ’s base price now slides in under the LCT threshold.

Volvo has also cut prices of its EX30 and EX40 small electric SUVs by up to $11,300, though it explained this was to give its new mid-size EX60 electric SUV more breathing room.

BMW has also cut iX1 pricing by up to $8900 and iX2 pricing by up to $7700, and even Zeekr’s entry-level X small SUV has received price cuts as it lags behind its more popular 7X showroom-mate.

It’s possible other new brands could further shake up Australia’s luxury car market. Zeekr and Denza are expanding their lineups, while Avatr has been spied testing in Australia.

MORE: Explore the Cadillac Lyriq showroom