Electric vehicles, everywhere, all at once
Australia’s electric vehicle transition is gathering pace amid rising fuel costs, attractive tax incentives and a growing range of more affordable models. But the data shows that uptake remains uneven, raising important questions about the next phase of growth.
Key takeaways
- Electric vehicle demand has shifted into a higher gear. Battery electric vehicles recently outsold petrol vehicles for the first time in Australia as consumer preference for electric and hybrid vehicles climbs to 48%, well above recent averages.
- Higher fuel prices, the Electric Car Discount and a growing range of lower-priced models have made electric vehicles a more compelling option for many households.
- Growth in purchase intent has been strongest among higher-income households, highlighting a widening gap with lower-income consumers and suggesting the next phase of the transition will depend on making EV ownership accessible to a broader share of Australians.
There has been a lot of talk (and data) about electric vehicles in recent months. In August, data from the Federal Chamber of Automotive Industries revealed that battery electric vehicles (with over 27,000 sales) outsold petrol vehicles (26,000) for the first time. Electric vehicles were also spotlighted in June quarter National Accounts data: motor vehicle spending rose 10.3% over the quarter, contributing nearly half of the increase in discretionary spending, which the ABS attributed to the rise in electric vehicle purchases.
Electric vehicles sales have accelerated against a backdrop of high cost of living, tax incentives and cheaper electric vehicle options. In Deloitte’s 2026 Global Automotive Consumer Study, lower fuel costs was the top reason Australian consumers considered purchasing an electric vehicle. The conflict in the Middle East has sent oil prices soaring throughout 2026, while the Electric Car Discount (ECD) has reduced the cost of eligible vehicles purchased through employer-sponsored novated lease arrangements and remains in place until March 2027, before it is phased out to 2029. The electric vehicle market has also become more accessible with more models available at lower price points. In 2021–22, less than 20% of EV sales were for models priced below $60,000. In 2024–25, that share had increased to almost 50%.
Aligning with increased sales, Australian electric vehicle purchase intent has risen since the onset of the Middle East conflict. Our global monthly ConsumerSignals survey of consumers and their spending behaviour shows that, when asked what type of engine they would prefer in their next vehicle, 48% of Australian respondents now prefer electric or hybrid vehicles – well above the 2024 average of 36% and 2025 average of 41%. In fact, while Asia Pacific remains the clear frontrunner, Australia has now cleared North America in the intent to switch to electric and has closed the gap on the rest of the world (Chart 1).
However, the gap between high- and low-income household electric vehicle purchase intent in Australia has widened since 2025 (Chart 2). The recent increase in Australian electric vehicle purchase intent has been driven primarily by high- and middle-income households. In 2026 so far, average purchase intent among high-income households has been 57%, compared to 36% among low-income households. This is consistent with findings from NSW researchers that economic status is the strongest predictor of electric vehicle registrations across more than 600 NSW postcodes, feeding concerns that the ECD tends to provide greater benefits to higher-income households.
Looking ahead, Australia's electric vehicle market is now moving beyond the early-adopter phase and into a period of more rapid growth. As the ECD is gradually phased out, there is also an opportunity to think about how the uptake of electric vehicles might broaden over time, especially when lower-income households remain a relatively untapped market. The next phase of Australia's electric vehicle transition is not just about how many electric vehicles are sold, but also who buys them.
This newsletter was distributed on 24 September 2026. For any questions or comments on this week’s newsletter, please contact our authors.
