Are Australian car buyers embracing plug-in hybrids?

This may seem like a strange question to even ask, given that the Federal Chamber of Automotive Industries (FCAI) has released data showing a mammoth 155 per cent leap in sales year-to-date in 2025. Yet there’s also been a big slowdown over the past few months.

The answer, then, is ‘yes’ for now, but ‘no’ in the longer term and in the larger scheme of things. And here’s why.

The move to electrification in Australia is part of a wider, global trend amongst consumers, and will accelerate here now that the New Vehicle Efficiency Standards (NVES) – which started penalising carmakers selling high-emissions vehicles from July 1 – will likely result in a wider choice of electrified vehicles. It may also result in some gas guzzlers costing more.

In other words, bestsellers like the diesel-powered Ford Ranger, Toyota HiLux and Isuzu D-Max will cost more in time, prompting buyers to seek out lower-emission (that is, electrified) alternatives. Particularly as many government and big fleet buyers now require ‘cleaner’ vehicles.

The sales charts do not lie.

As we already mentioned, PHEVs are up 155 per cent to the end of August; hybrid volume has jumped by about 11 per cent, whilst the Electric Vehicle Council (EVC) has released data showing that EV demand is also up over last year (albeit at a much slower rate than previously, which has led to false media reports decrying their demise), at around 7.5 per cent of total market penetration.

Note that not all EV brands, such as Tesla, report their sales to the FCAI.

The actual numbers show that hybrids lead the charge (so to speak) at nearly 130,000 registrations year-to-date. Next up are PHEVs at over 33,000 sales, while the EVC has reported slightly over 10,000 EVs sold so far in 2025. Rises all round for electrification, then, but petrol and diesel figures combined have breached 600,000 units over the same time frame.

Furthermore, the PHEV figures are misleading, since they are heavily skewed towards the start of this year, when consumers rushed to beat the Federal Government’s fringe benefits tax (FBT) exemption deadline. When that finished on March 31, demand dropped sharply, nearly halving in April from nearly 7000 the previous month, though it has settled to around 4000 registrations per month since.

This is understandable considering the benefits for consumers who took advantage of the scheme.

Taking out a lease on a PHEV that was priced underneath the existing $91,387 Luxury Car Tax (LCT) threshold meant savings of nearly $12,000, as the FBT didn’t have to be paid. Little wonder, then, that sales went through the roof at the start of 2025.

That said, PHEV sales have started climbing again, and with a growing number of PHEV models on offer and more coming, natural competition should lead to big savings over the recommended retail price.

The BYD Shark 6 ute, for instance, costs $59,400 drive-away in Perth, but existing stocks have been heavily discounted to help shift units. The same applies to other popular PHEVs, including the best-selling BYD Sealion 6 and Mitsubishi Outlander.

PHEV sales may be down, but they are far from out.

In summary, then, ending the FBT saving on PHEVs has led to a sales dive, but only after an artificially high peak just prior to the deadline. With WA also ending its Zero Emission Vehicle Rebate Scheme just a few weeks later in mid-May, it’s left to market forces to dictate where electrification goes from here.

Government incentives, be it for EV adoption or anything else that can save buyers money, do work. To paraphrase Kevin Costner’s most beloved movie, if they don’t FBT it, they will come.