Battery-powered electric vehicle sales fell sharply last quarter and may have peaked as consumers increasingly turn to hybrid models that attract tax concessions, according to new analysis.
Quarterly vehicle sales data released by the Australian Automobile Association on Monday reveals petrol-powered cars continued to decline in popularity, with sales falling by 9.16% in the three months to 30 September.
During this same period, electric vehicle sales declined by 25% from 25,353 to 18,990, with market share falling from 8.10% to 6.57% – the lowest since 2022.
According to the AAA, hybrid sales increased from 46,727 to 48,282 – a 3.3% jump. While plug-in hybrids – which have a battery that can be charged externally to limit reliance on petrol – increased by 56%, taking the market share to 2.5%.
“There have been significant quarterly fluctuations over the past seven quarters, but sales figures over that period confirm a clear trend of growth for hybrids, while battery electric vehicle market share appears to have peaked for now,” the AAA analysis said.
“In the first half of 2023, battery electric vehicles outsold hybrids, but since then hybrids have outsold battery electric vehicles in five consecutive quarters.
“Hybrids are now outselling battery electric vehicles even in the ACT, which has long been Australia’s strongest market.”
The analysis noted plug-in hybrids were exempt from fringe benefits tax until 1 April 2025, which could save consumers thousands of dollars on new cars under a novated lease.
“Many jurisdictions still offer stamp duty and registration discounts for battery electric vehicles, but government rebates for [these] purchases have now ceased in all states and territories, except Western Australia,” it said.
“That state had the lowest September 2024 quarter decline in battery electric vehicle market share among all jurisdictions (-0.58% compared to -1.53% nationally).”
The analysis found medium SUVs remained the most popular cars on the market with 73,111 sold in the third quarter. Half of these sales were petrol-powered cars, almost a third were hybrids, 8% were plug-in hybrids and another 8% were electric.
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More than 99% of utes sold during the three-month period were petrol-powered, as were 98% of vans. But the share of petrol-powered people mover sales dropped from 97.6% to 89.1%, thanks to new models.
“After releasing a hybrid model in mid-2024, Kia accounted for the bulk of September quarter hybrid people mover sales,” the AAA report said. “Lexus also offers a hybrid people mover (released in December 2023) but this is a low-selling luxury model.”
In September, the cheapest electric vehicle on the market was $31,000, after MG cut the price of its entry-level MG4 hatchback.
At the time, Polestar Australia’s managing director, Scott Maynard, said Australia’s high-end electric car market was restrained by the 33% tax on high-end cars and greater competition could be unlocked if the federal government removed it.
Aman Gaur, head of legal, policy and advocacy at the Electric Vehicle Council, has said he expects sales of purely battery electric vehicles to rise once the federal government’s new vehicle efficiency standard begins to influence the market from next year, which should boost local supply.