The Changing Showroom

The modern electric-car era began in 2010, when Nissan launched the Leaf, widely regarded as the first mass-produced electric car for the mass market. Two years later, Tesla's Model S demonstrated that an electric vehicle could compete on performance, range and desirability as well, but the technology remained relatively niche for most of the following decade.

The inflection point came some 10 years later as global electric-car sales more than doubled in 2021 to 6.6 million vehicles, reaching almost 9% of new-car sales. By 2024 that share had passed 20%, and in 2025 one in four new cars sold worldwide was electric. What had begun as an alternative powertrain was becoming a mainstream part of the global car market.

Australia has made that transition more slowly. For years, buyers faced a combination of higher upfront prices, limited model choice, concerns about driving range and an immature public-charging network. Those concerns have been persistent: Australian research has identified purchase price, range anxiety and access to charging as three of the biggest barriers to buying an EV.

The economics of buying an EV are changing. Today petrol remains considerably more expensive than it was at the beginning of the decade and the gradual rise in the price of oil shows no sign of abating, further exacerbated by instability in the Middle East and Russia. Simultaneously greater competition, particularly from Chinese manufacturers, has pushed the entry price of new EVs sharply lower.

Australia saw its first sub-$30,000 battery-electric car arrive in 2025, alongside a growing field of models in the $30,000–$40,000 range. Globally, the same forces are at work: greater manufacturing scale, falling battery and vehicle prices and increasingly intense competition are steadily eroding one of the largest barriers to adoption.

In 2025, Australians bought 103,270 battery-electric light vehicles, representing 8.7% of reported new light-vehicle sales, compared with just 3.2% in 2022. Add plug-in hybrids and the 2025 share rises to 13.2%. These are different measures of electrification, but together they show a market moving beyond its early-adopter phase.

The change further accelerated in the first half of 2026: 103,849 battery-electric sales, already slightly above the whole of 2025. Battery electrics represented 17.0% of January–June sales; together with plug-in hybrids, the share was 25.8%. These are half-year observations, not a forecast of the year-end result. The quarterly lines let us inspect that movement without disguising a partial year as a completed one. Hover across the chart to compare every powertrain’s share and sales count for the same quarter.

Australia's detour to BEV adoption

For much of the early Australian BEV market, Tesla was the market. It did more than introduce a different type of drivetrain. Tesla also challenged the structure of the automotive industry itself, selling directly to customers rather than relying on the traditional franchised-dealer model and treating software, charging and the vehicle as parts of a more integrated product.

That early lead was substantial. In 2023, Tesla sold 46,116 vehicles in Australia. Its Model Y and Model 3 alone accounted for more than half of all battery-electric vehicles sold that year. Yet Tesla's success did not trigger an immediate wholesale transition to battery-electric cars. EVs reached 7.5% of Australian light-vehicle sales in 2023, while more than four out of five new vehicles were still powered solely by internal combustion engines.

Instead, much of Australia's transition initially happened through hybrid vehicles.

Hybrids offered consumers some of the benefits of electrification — lower fuel consumption and reduced dependence on the petrol engine — without requiring a change in driving habits or access to charging infrastructure. For established manufacturers they also provided a more evolutionary path: electrification could be introduced into familiar vehicle categories while retaining combustion engines, established production systems and protecting the existing dealership model.

Toyota became the clearest example. By 2024 it sold 118,081 hybrids in Australia, almost half of all Toyota vehicles sold that year. Across the market, Australians bought 172,696 conventional hybrids — more than twice the number of battery-electric vehicles sold during the year. The divergence became particularly visible during 2024. In the September quarter, battery-electric vehicles accounted for just 6.6% of new light-vehicle sales, while hybrids had climbed to 16.7%. Hybrids had by then outsold BEVs for five consecutive quarters, despite both technologies taking share from conventional petrol and diesel vehicles.

So Australia's first substantial move away from pure internal combustion was not, in fact, a wholesale switch to battery-electric cars. It was a progressive electrification of the existing market.

A bigger market, a different leader's share

But what a difference 12 to 24 months makes.

By 2026, the shape of the Australian market had shifted again. Battery-electric vehicles were no longer simply gaining ground at the margins. In the June quarter, Australians bought 69,414 BEVs; more than either conventional hybrids (57,919) or plug-in hybrids (34,937) sold over the same period, and although BEVs still trail hybrid vehicles in aggregate most recent quarter-on-quarter growth was 108.6%.

The Australian EV market is becoming broader, more competitive and considerably more crowded. Tesla remains an important manufacturer, but it now sits alongside BYD, Geely, GWM, MG, Chery, Zeekr, Polestar and an expanding group of established manufacturers offering their own battery-electric models.

The visualisation below shows this new world of automotive manufacturers: a market in which electrification is not simply changing what powers the car, but reshaping the competitive landscape of the Australian motor industry itself.

Who are we buying the cars from?

Grouping the brands by country of ownership shows another dimension of the changing vehicle landscape and we see this shift happen rapidly over the last 24 months as BEV sales increase and traditional manufacturers are left trying to catch up.

A badge’s national identity can outlast its ownership by decades. Some of the names most closely associated with a country now belong to groups headquartered elsewhere, even as their design, heritage and marketing continue to draw on those roots. Looking at who owns the brands reveals a different map of the car industry from the one their badges might suggest.

MINI and Rolls-Royce retain unmistakably British identities, but both belong to Germany’s BMW. Jaguar and Land Rover sit within India’s Tata Motors. MG and LDV belong to China’s SAIC, while Volvo, Polestar and Lotus sit within China’s Geely group. These shifts are not simply a consequence of the latest electric-car boom: foreign ownership is already an established part of many familiar brands’ stories.

The flags therefore represent country of brand ownership. They show how today’s ownership groups share the Australian market, rather than where each brand began or where its cars are built.

What are the highest selling models?

Tesla’s Model Y remains the leading battery-electric model, with 14,499 sales in Q2 2026, almost twice its 7,317 sales in the same quarter a year earlier. But buyers are increasingly spreading their purchases across a wider field. The BYD Sealion 7 rose from 3,026 to 8,048 sales over that period, while the Geely EX5 climbed from 1,657 to 5,319. Both grew faster than the Model Y, showing how quickly its challengers are gaining ground.

The leaders differ across powertrains. Toyota’s RAV4 led conventional hybrids with 11,052 sales in Q2 2026, while BYD’s Shark 6 led plug-in hybrids with 6,013. BYD also held second and third place in plug-in hybrids with the Sealion 8 and Sealion 6. Toyota’s strength in hybrids, Tesla’s continuing lead in battery electrics and BYD’s growing presence across rechargeable powertrains show that the shift in buying patterns has several distinct leaders.

The continued strength of 4×4 utes is another feature of the market: Ranger 4×4 and Hilux 4×4 recorded 13,230 and 10,911 sales respectively in Q2 2026. Tax incentives available to qualifying work vehicles could partly explain the continued strong sales in this segment, including fringe benefits tax exemptions for eligible utes with limited private use.

Battery Electric Adoption By State

The ACT is the standout: battery-electric vehicles accounted for 40.1% of new light-vehicle sales in Q2 2026, compared with 7.3% in the Northern Territory. Canberra’s relatively compact urban geography could make the switch easier, with less dependence on long-distance travel for everyday journeys. Policy has also helped lower the barriers: the ACT’s zero-emissions vehicle strategy has combined purchase and registration incentives with support for home and public charging. Together, these conditions could help explain its substantial lead.

The Northern Territory faces a different practical challenge. Long distances between communities and a small, dispersed population make a dependable charging network harder to provide. The NT’s EV strategy identifies distance, extreme climate, range concerns and charging infrastructure as barriers to uptake. For buyers who regularly travel beyond the main centres, confidence in where they can recharge is likely to matter as much as the vehicle itself. Geography and charging access are plausible contributors to the gap, alongside vehicle cost and availability.

What new car sales don't tell us

A state can move quickly towards electric new-car sales while its roads remain dominated by petrol and diesel for many years. Each year’s purchases replace only part of the existing fleet, and trading in a combustion car usually passes it to another owner rather than takes it off the road. The transition across an entire state therefore takes much longer than the shift in its showrooms.

At 31 January 2025, Australia had 20.28 million registered passenger and light commercial vehicles. Just 250,380 — 1.23% — were in BITRE’s combined battery/fuel-cell electric category. That is roughly one in 81 vehicles, a much more sobering measure of progress than the share of new sales. The source groups battery and fuel-cell vehicles together, so this is not a separate BEV-only count.

The age of the fleet helps explain the gap: 54.1% of registered light vehicles were at least ten years old, and 31.0% were at least fifteen, using year of manufacture to calculate age. In its 2023 submission on vehicle emissions standards, the Australian Automobile Association put light-vehicle lifespans at 15–20 years. A car can pass through several owners during that time. Faster BEV sales today will gradually feed the second-hand market, but replacing the accumulated fleet is a transition measured in decades.

Australia in an international context

Australia’s shift looks different alongside other major car markets. In the IEA’s 2025 figures, battery-electric and plug-in hybrid cars together accounted for 15% of new car sales in Australia, compared with 53% in China, 35% in the UK, 11% in South Korea and 10% in the US.

China shows what happens when electric vehicles become a price competitor as well as a technological alternative. Years of policy support, intense competition and falling battery costs have helped close the purchase-price gap. The IEA reports that 70% of battery-electric cars sold in China in 2025 cost less than the average conventional car. Affordability offers a compelling explanation for adoption reaching the mass market. (IEA affordability analysis; 2026 outlook.)

The UK and US illustrate the importance of policy direction. The UK combined manufacturer sales targets with a new grant for eligible electric cars in 2025. The US ended federal purchase tax credits after September; electric-car sales then fell sharply in the final quarter. The contrast suggests that momentum depends partly on whether policy makes the next purchase easier or harder. (IEA market analysis.)

Australia’s policy support arrived relatively late on the vehicle-supply side. Its New Vehicle Efficiency Standard began applying emissions targets to new vehicles entering the market from July 2025. The UK’s zero-emission sales mandate had started in 2024, alongside an existing emissions-regulation framework. Australia’s standard targets suppliers’ average emissions, rather than requiring a fixed electric share of sales. That later start could partly explain why Australia has taken longer to attract the breadth of lower-emission models available in more established markets. (Australian regulator; UK framework.)

There has also been meaningful support for Australian buyers: the Electric Car Discount has applied since July 2022, providing an FBT exemption for eligible employer-provided electric cars, including qualifying salary-packaged vehicles. Its reach depends on how a buyer acquires their car, so it is not a general purchase rebate. Alongside the state incentives discussed above, this could help explain the recent acceleration. The international comparison suggests that the timing, reach and continuity of policy support matter alongside price and charging access. (Treasury; ATO.)

South Korea’s rebound also followed policy support, including earlier publication of purchase-subsidy guidelines. Australia’s growth, meanwhile, increasingly included plug-in hybrids. That distinction matters: a rising electric share can reflect buyers choosing an intermediate step rather than moving directly to a battery-only car. (IEA market analysis.)

Sources & assumptions

Data retrieved 15–16 September 2026.