Australian electric car sales drop 25% as buyers opt for hybrids

The elimination of rebates resulted in EVs accounting for just 6.5% of the market in the third quarter, down from 8.1%

Australia has joined a growing number of countries where car buyers are reluctant to spend money on electric vehicles. Latest figures from the Australian Automobile Association show that sales of electric vehicles in the country fell 25% in the three months to October.

Electric vehicle registrations fell from 25,353 units in the second quarter to 18,990 units in the third quarter, causing battery vehicles’ share of the automotive market to fall from 8.1% to 6.6%, the lowest level in two years. The overall auto market fell by a much smaller 7.6% during the same period.

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Those who rejected electric cars didn’t all jump back to regular old combustion engine cars – the drop in gasoline sales wasn’t as severe as EV registrations, but it was still down 9.2%. Instead, they are increasingly shifting their focus from fully electric to partially electric. Hybrid sales increased 3.3% in the third quarter from 46,727 to 48,282 units, but plug-in hybrid sales increased an astonishing 56%.

Modern plug-in hybrids now offer such long electric ranges that many buyers are finding that they can rely on battery power for all their commutes and still have the safety of a gas tank and internal combustion engine. But analysts believe the main reason for switching from electric cars to hybrids is financial.

Discounts on battery-electric vehicles have been removed across the country except Western Australia, creating a disincentive for buyers. But AAA explains that plug-in hybrids will remain exempt from the fringe benefits tax until April 2025, potentially saving drivers thousands of dollars in lease payments.

“The past seven quarters have seen significant quarter-to-quarter fluctuations, but sales data for that period confirm a clear growth trend for hybrid vehicles, while the market share of pure electric vehicles now appears to have peaked,” AAA said.

“In the first half of 2023, sales of pure electric vehicles surpassed those of hybrid vehicles, but hybrid sales have since surpassed those of pure electric vehicles for five consecutive quarters.”

Source: Australian Automobile Association
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