Drive
What’s going on with electric car sales?
EV sales may have taken a breather, but new regulations and an onslaught of new models are ramping up interest in fuel-efficient vehicles.
by Toby Hagon
Published
9 min read
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Drive
18 min readDrive
EV sales may have taken a breather, but new regulations and an onslaught of new models are ramping up interest in fuel-efficient vehicles.
by Toby Hagon
Published
9 min read
Text size
by Toby Hagon
Published
Text size
Plug-in hybrids are increasingly playing a starring role in the electrification resurgence and better electric vehicles from more brands are helping pure battery powered models fight back from a 2024 sales slumber.
While some buyers are reluctant to make the EV leap, more and more are taking advantage of the government’s fringe benefits tax exemption as car makers respond to changing regulations by unleashing more electrified offerings.
And for those not ready to switch to a wholly electric car, there’s a raft of hybrids and plug-in hybrids that are increasingly appealing to the masses.
The Australian car market is changing – and quickly.
Toyota still dominates overall sales, with 19.4 per cent share for the first six months of 2025, according to figures supplied by the Federal Chamber of Automotive Industries and the EV Council.
But sales of pure diesel and petrol cars are slowing, and hybrids and plug-in hybrids (PHEVs) are taking their place, while EVs are rebounding from a drop.
That’s allowing new brands from China – at the forefront of the electrification race - to reshape the market.
Previously big players such as Volkswagen, Nissan and Subaru have slipped out of the list of top-10 sellers and been replaced by the likes of GWM, BYD and MG (the latter owned by SAIC).
The recent introduction in Australia of the New Vehicle Efficiency Standard (NVES), which encourages car makers to reduce their CO2 emissions, plays perfectly into the hands of Chinese manufacturers leading in the development of EVs and PHEVs.
The first half of 2025 has been, to some extent, the tale of two halves.
Sales of pure battery electric vehicles stumbled to just 5.6 per cent of the market in the first quarter.
They rebounded to 9.2 per cent of the market in Q2, in part due to the arrival of the updated Tesla Model Y, the best-selling battery electric vehicle (BEV) in the country.
Tesla’s EV share has been slipping – as have its sales – but the American brand still accounts for almost one in three battery electric vehicle sales.
And in June – where EVs eclipsed 10 per cent of overall new vehicle sales – the new Model Y was the top-selling SUV in the country, with 3,457 deliveries.
EVs have also benefitted from the fringe benefits tax (FBT) exemption that previously also applied to plug-in hybrid electric vehicles (PHEVs).
It means salaried employees can pay for their car and its running costs from their pre-tax income but avoid the FBT that would usually apply when using the car for personal transport.
Plug-in hybrid EVs demonstrate the potential pull of the FBT exemption.
Australians snapped up a record 13,711 PHEVs in the first three months of the year, many rushing to take advantage of the generous tax break before it ended on 1 April 2025.
Without that financial incentive – it remains for BEVs only - in the second quarter PHEV sales dropped 13.2 per cent to 11,902.
But the CEO of the National Automotive Leasing and Salary Packaging Association, Rohan Martin, says that number is masked by the arrival of the BYD Shark 6.
Deliveries trickled out from January 2025 but the first PHEV ute on the market kicked off with a solid waiting list as demand surged.
It’s been a sales success, even luring in those previously wedded to BEVs.
Rob Dean is the Chairperson of the Tesla Owner’s Club of WA. He still drives a Tesla Model S but earlier this year added a Shark to his garage.
He points to its gravel road prowess and value as tempters, especially for those longer trips to remote areas where it can run purely on petrol.
“The value for money is ridiculous,” says Dean.
But other PHEVs have experienced a sizeable downturn.
In the first three months of 2025 the former top selling PHEV, the Mitsubishi Outlander, notched up 2,544 sales nationally. In the second quarter just 417 were sold, representing an 84 per cent drop.
Sure, some of that may have been sales pulled forward to the first quarter to leverage the FBT exemption.
But Martin says the big difference has been the removal of the FBT exemption on PHEVs.
“We do see that it will suppress the level of demand for PHEVs that we otherwise could have achieved,” he says. “Some will consider a move to a BEV. However, with some (market segments), larger SUVs or dual-cab (utes) you don’t have a BEV alternative.”
The EV Council is calling for more to be done to encourage consumers to buy electric vehicles.
State-based rebates previously helped kick things along but now the heavy lifting is being done by the FBT exemption for those salary sacrificing through a novated lease.
There’s the potential to save thousands, albeit with often higher interest rates for leasing.
Recent calls for the scheme to be scrapped have the EV Council (EVC) and leasing sector on edge.
“NVES is great, but we need to do more on the demand side,” says Aman Gaur, head of legal policy and advocacy at the EVC.
“We’ll continue to see people taking up electric cars, but we really need to see governments support them through investments in charging infrastructure, demand-side incentives that complement that interest.”
NALSPA’s Rohan Martin says the FBT exemption has helped steer around half of those taking out a novated lease towards a BEV.
“The FBT exemption is helping to drive volumes,” he says. “It has a significant role to play for a period of time in supporting EV uptake.”
Jacelyn Chua is one who has adopted the EV life.
Last year she bought a Tesla Model 3 outright and her husband will soon make them a two-Tesla family by leveraging the FBT exemption on a new Model Y.
For her it was the cost savings – charging is often free via solar and the maximum she pays from the grid is $4 a week.
“I’d actually picked out a Toyota hybrid, the C-HR and it was about $60,000,” she says. “Tesla had a reduction in price around about that time that brought their Model 3 down to about $60,000. My husband and I thought why get a hybrid if we can get a full EV?”
Having learnt to live with a Tesla and enjoyed the EV experience they are about to double up on Teslas, this time leveraging the FBT exemption.
“My husband is replacing his current car with the new Model Y … and he is novating it through his work. He did look at other EVs as well, but it was just the value for money for us.”
The thing that promises to really kick the electrified motoring world along is shiny new brands.
More than a dozen new Chinese brands have big aspirations for the Australian market with many planning unprecedented model rollouts.
Between them MG, Chery, BYD, Geely and others are planning dozens of new models over the next 12 months.
Short development cycles and ambitious product pipelines mean Chinese brands are spreading their wings to cover almost all market segments – with an emphasis on PHEVs and BEVs.
The Chinese brands are even targeting the top end of town, with brands such as IM (part of MG) and Denza (part of BYD) positioning themselves in prestige territory with the aim of luring buyers from traditional luxury marques.
And buyers are open to the new choices, especially electrified options.
A recent RAC survey of 2,598 members showed 53 per cent would consider a hybrid in the future.
Members cited fuel efficiency, environmental benefits, versatility, technological appeal and reliability as prime reasons they would look at a hybrid.
Many also pointed to the positive experiences of friends and family who drove a hybrid while also relaying potential concerns about EVs, from charging infrastructure and battery life to the higher cost of entry.
The electrified footprint is broadening too.
Diesel has long been the fuel of choice for utes and heavy duty off-roaders.
But the first half of 2025 has demonstrated the market is ready for change.
The arrival of the BYD Shark 6 prompted a flourish of sales for a car that uses a 1.5-litre four-cylinder engine and two electric motors.
It was backed up by the later arrival of the GWM Cannon Alpha PHEV and Ford Ranger PHEV.
Between the trio, the new PHEVs notched up 10,755 of the 108,105 4x4 ute sales in the first half.
That figure broadly lined up with the drop in diesel sales, suggesting buyers are happy to switch if the offering is right.
Of course, utes are also popular purchases for company fleets, many of which are trying to reduce their carbon footprint.
Te Shark’s official CO2 emissions are claimed at 46 grams per kilometre versus 189g/km for a Ford Ranger with a four-cylinder diesel.
While there will be much less difference between the two in the real-world for those who don’t recharge the BYD, the on-paper win is enormous.
Despite big distances and vast stretches of outback, Western Australians largely fall into line with the rest of the country on EV buying habits.
In the first half of 2025, 10.9 per cent of cars sold around the country were bought in WA and the state accounted for 11.3 per cent of overall EV sales.
Of the 67,899 cars Western Australians bought in the first six months of 2025, 5138 – 7.6 per cent – were BEVs. That compares with a national average of 7.5 per cent.
PHEVs accounted for 4.2 per cent of the WA market, matching the rest of the nation, although regular hybrids were slightly down, at 13.8 per cent versus 14.7 per cent.
Throw it all into the mix and all industry observers expect sales of hybrids and EVs to boom over coming years.
With or without an FBT exemption the sheer volume of planned new models and the lure (and potential penalties) of the New Vehicle Efficiency Standard that encourages car makers to lower the emissions across their entire fleet, all but guarantees a sales bonanza for electrified vehicles.
“We’re seeing more and more car makers bring in more and more electrified options,” says the EV Council’s Gaur, adding that government policy is key.
“We think that the market is showing a lot of confidence. We’ll continue to see people taking up electric cars, but we really need to see governments to support them through investments in charging infrastructure and demand-side incentives that complement that interest.”
