The February 2025 new car sales figures have been released, revealing a drop of 9.6% in total sales on the same month last year, as consumer demand remains subdued amid cost-of-living pressures. These pressures are also impacting the types of vehicles that are being purchased, with hybrids and plug-in hybrids increasing in popularity while battery electric vehicles, diesels, and petrol powered vehicle sales have declined.
The biggest drop has been seen in battery electric vehicles (BEVs or pure EVs), which are down by almost half year on year. There were 15,004 EVs sold for the year to date in 2024 compared to 8,695 being sold so far in 20251. This is despite the flood of lower cost EVs now entering the Australian market.
So when Electric Vehicle Council CEO Julie Delvecchio, states that “Electric vehicle sales in Australia remain resilient at a time when new car sales are trending downwards and the high cost of living continues to hit families hard.” What is she actually referring to?
Well, the Electric Vehicle Council includes plug-in hybrids or PHEVs in their definition of an “electric vehicle” because they have a plug as well as an internal combustion engine. PHEV sales have seen the greatest growth year on year, even though they have accounted for around 1% of all vehicles sold in Australia historically.
One vehicle, the BYD Shark PHEV ute, contributed more than 2,000 units to the overall February result with 4,871 PHEVs sold in total. PHEV sales have also been largely driven by the imminent conclusion of the Federal Government’s FBT exemption for PHEVs, which is due to end on April 1, 2025. The FBT exemption enables Australian motorists to save on the upfront cost of a lower-emissions car, through tax benefits provided to their employers.
The electric only range for PHEVs varies depending on the battery size and vehicle, but it’s usually in the vicinity of 50km from my experience. Research commissioned by the National Automotive Leasing and Salary Packaging Association (NALSPA) late last year shows PHEV drivers predominately use their cars like a pure EV, with most plugging in at least twice a week and using electric power only for two-thirds of their trip.
“We are now two months into the Government’s New Vehicle Efficiency Standard (NVES), and while the supply of battery electric vehicles has risen dramatically, consumer demand has fallen by 37 per cent this year compared with the first two months of 2024.
We knew the supply of EVs would increase and there are now 88 models supplied to the Australian market. However, our grave concern has always been the rate of EV adoption and what assumptions the Government had made in its modeling around consumer demand for EVs in the NVES. This modelling remains secret.
The easy part is to set aspirational targets but without consumers demanding EVs, the NVES will not succeed. It is time for the Government to consider the realities faced by consumers,” said FCAI Chief Executive Tony Weber.
Those realities are that Australians are continuing to purchase SUVs and light commercial vehicles at an even greater rate with the Passenger Vehicle Market down by 6,823 vehicle sales (-34.8%) over the same month last year.
Toyota was the market leader with sales of 18,832 during February, followed by Mazda (8,797), Kia (6,707), Ford (6,337) and Mitsubishi (6,119). The Toyota RAV4, which is available as a hybrid vehicle, was Australia’s top selling vehicle with sales of 4,405 followed by the Ford Ranger (4,040), Toyota HiLux (3,616), Toyota Prado (2,723) and the Mitsubishi Outlander (2,385), which is available as a plug-in hybrid.
Under the New Vehicle Efficiency Standard, each vehicle manufacturer has a set average CO2 target for all new cars they produce, which they must meet or beat. The impact of NVES will potentially not be seen for some years because if a car company is above the CO2 limit curve and have not met the target for that year and they will have two years to bring their result back to zero (for example, by offsetting with traded units), before a financial penalty becomes payable. Penalty notices for values that are above zero will be issued from 1 February 2028 onwards.
Time will tell whether the NVES delivers the optimistic savings forecasted by the Federal Government and if it has any impact on the car buying behaviour of the Australian public?
Photograph by Driven Women Magazine.
- Data combined from the © Electric Vehicle Council of Australia Limited 2024. Based on information provided by and with the permission of the Electric Vehicle Council of Australia Limited & Federal Chamber of Automotive Industries (or “FCAI”), VFACTS Service.
All other vehicle sales data sourced from Federal Chamber of Automotive Industries (or “FCAI”), VFACTS Service.