Australia Electric Vehicle Market Size, Share and Outlook - Growth Analysis Report and Forecast Trends (2026-2035)

How large is the Australia electric vehicle market, and where is it heading?

Quick Answer

The Australia electric vehicle market covers the purchase, deployment, and operation of battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) across passenger, commercial, and fleet segments. In 2025, a record 156,753 electrified vehicles were sold (103,269 BEVs + 53,484 PHEVs), representing 13.1 per cent of new car sales, up from 9.5 per cent in 2024 (FCAI and Electric Vehicle Council). BEV sales crossed 100,000 for the first time; PHEV sales more than doubled. Australia's total EV fleet surpassed 454,000 vehicles. Growth is anchored by the New Vehicle Efficiency Standard (NVES, from 1 January 2025), the AUD 475 million Driving the Nation Fund, and the Climate Change Authority's requirement that half of new cars sold 2025-2035 be electric. The electric vehicle market is projected to reach AUD 55.72 billion by 2035 at a 20.0 per cent CAGR.

Market Overview

The Australia electric vehicle market reached a structural milestone in 2025 that the automotive industry had been tracking for several years: BEV annual sales broke through the 100,000-unit barrier for the first time, reaching 103,269 units per FCAI and EVC data released in January 2026. Combined with 53,484 PHEVs (a staggering 130.9 per cent increase year-on-year), the total electrified vehicle market reached 156,753 units. EVs claimed 13.1 per cent of all new car sales in 2025, compared with 9.5 per cent in 2024 and 5.0 per cent in 2022. Australia's total EV fleet now stands at more than 454,000 vehicles.

Despite the headline volume record, the composition of growth in 2025 was notable. BEV market share growth was described by FCAI chief executive Tony Weber as 'anaemic', gaining just 0.9 percentage points from 7.4 per cent in 2024 to 8.3 per cent. PHEV sales were the genuine standout, with buyers opting for petrol backup to manage range anxiety in an electric vehicle market where public charging, while expanding, still falls well short of demand. The NRMA's 2025 member survey found half of respondents would not buy an EV in the future, up from about a third in 2024, with charging infrastructure and price the dominant concerns.

Three structural forces will determine the pace of growth in the Australia electric vehicle market through the forecast period. First, the NVES is requiring manufacturers to progressively lower fleet-average CO2 emissions, creating a supply-side mandate. Second, the AUD 475 million Driving the Nation Fund is deploying 117 highway charging stations, dealership chargers, and heavy vehicle hubs. Third, the Electric Car Discount FBT exemption, credited with aiding ~100,000 EV purchases since 2022, is under statutory review, creating policy uncertainty weighing on fleet decisions.

Key Market Trends and Insights

• BEV sales break 100,000 barrier and Chinese brands dominate supply: BEVs exceeded 100,000 units for the first time in 2025, reaching 103,269 deliveries (+13.1 per cent YoY). Chinese brands supplied 77.5 per cent of all BEVs sold. BYD's diverse model range drove a 77.3 per cent increase to 25,287 units, making it Australia's second-largest EV brand.
• PHEV sales more than double as buyers seek a transitional option: PHEV sales reached 53,484 units in 2025 (+130.9 per cent): the strongest growth of any powertrain despite the removal of FBT exemption for PHEVs from 1 April 2025. The BYD Shark 6 PHEV ute sold 18,073 units, becoming BYD's best-selling Australian model.
• NVES in force from January 2025, first performance period complete: Australia's first-ever NVES commenced 1 January 2025. The first performance period ended 31 December 2025. Fleet CO2 targets: 141g/km for passenger vehicles in 2025, tightening to 108g/km by 2029 and ~81g/km from 2033. Projected to reduce transport CO2 by 321 million tonnes by 2050 and save motorists AUD 95 billion in fuel costs.
• Fast charging network grows 22% in H1 2025 but major scale-up required: Fast-charging locations grew to 1,272 sites with 4,192 plugs by mid-2025, up 22 per cent in six months. NSW leads with 357 locations, followed by Victoria with 311. Deloitte Australia estimates 27,500 new public EV chargers will be required by 2033: an eight-fold increase.
• Climate Change Authority projects 5 million EVs needed by 2035: Half of all light vehicles sold between 2025 and 2035 must be electric to meet the lower bound of Australia's legislated 2035 emissions target of 62-70 per cent reduction below 2005 levels. This implies 5 million-plus EVs on Australian roads by 2035: ~20 times the current fleet.

Australia Electric Vehicle Market Size and Forecast

Key Takeaways: Australia Electric Vehicle Market

The 100,000 BEV Milestone Is Commercially Significant But Structurally Insufficient

Australia's first-ever annual BEV sales figure above 100,000 units is a market milestone. At the same time, the FCAI chief executive's frank assessment that BEV market share growth of 0.9 percentage points over two years is 'anaemic' is equally accurate. Reaching 13.1 per cent total EV penetration (BEV + PHEV) stands well below the trajectory required to reach the Climate Change Authority's target of 50 per cent by the mid-2030s. The structural divergence between PHEV sales growing at 130.9 per cent and BEV sales growing at 13.1 per cent tells a consumer confidence story: Australians are moving toward electrification but at a pace constrained by BEV price premiums and persistent gaps in public charging outside capital cities.

Chinese Brands Are Reshaping the Competitive Landscape

Chinese-origin brands supplied 77.5 per cent of all BEVs sold in Australia in 2025. BYD's 77.3 per cent year-on-year growth brought it within 3,569 units of Tesla in BEV-only sales, and BYD's total Australian volume (52,415 units including PHEVs) already exceeds Tesla's by a wide margin. Tesla's BEV market share has fallen from 53 per cent in 2023 to 42 per cent in 2024 to 28 per cent in 2025 as Chinese brands expand model ranges and price points. The BYD Atto 1 at AUD 23,990 sets a new affordability benchmark that will define competitive positioning in the electric vehicle market through the forecast period.

Charging Infrastructure Scale-Up Is the Biggest Operational Constraint

Fast-charging locations grew 22 per cent in H1 2025 alone to 1,272 sites. But Deloitte Australia's analysis indicates 27,500 new public chargers will be needed by 2033: an eight-fold increase. Approximately 75 per cent of Australians do not have access to home charging (they rent or live in apartments) and face a fundamentally different calculus than garage-equipped homeowners. The Driving the Nation Fund's AUD 475 million, ARENA's AUD 266 million allocation, and NRMA's National Highway Network are the federal response, but state-level and kerbside deployment has to scale much faster to support the Climate Change Authority's 5 million EV target by 2035.

Key Insight

The Australia electric vehicle market is no longer supply-constrained in the way it was in 2022 and 2023, when wait times of six months to a year were common. In 2025, most models had reasonable availability, and the constraint on growth has shifted firmly to demand-side factors: price parity with equivalent petrol vehicles, accessible public charging, and consumer confidence in the technology for long-distance travel. The entry of BYD's Atto 1 at AUD 23,990 in late 2025 and the expected arrival of sub-AUD 25,000 models in 2026 represent the most important demand-side catalysts for the forecast period.

Key Trends and Recent Developments in the Australia Electric Vehicle Market

NVES First Performance Period Complete, December 2025

Australia's first-ever New Vehicle Efficiency Standard completed its first performance period on 31 December 2025, with results published by the NVES Regulator. The standard requires manufacturers to meet progressively stricter fleet-average CO2 targets: 141g/km for passenger vehicles in 2025, 108g/km by 2029, and ~81g/km from 2033. Projected by DCCEEW to reduce transport CO2 by 321 million tonnes by 2050 and save motorists AUD 95 billion in fuel costs. By 2030, the NVES is projected to reduce new passenger car emissions by over 60 per cent and halve light commercial vehicle emissions compared with 2024.

BYD Overtakes Competitive Landscape, 2025

BYD's total Australian volume reached 52,415 units in 2025, more than 80 per cent above Tesla's 28,856 deliveries when PHEVs are included. BEV-only sales put BYD within 3,569 units of Tesla, with 77.3 per cent year-on-year growth implying potential overtaking in 2026. BYD's model range spans affordable hatchbacks (Dolphin, Atto 1 from AUD 23,990), mid-size SUVs (Sealion 7, Atto 2), performance sedans (Seal), and utes (Shark 6), covering more of the market than any other EV brand. The premium sub-brand Denza launched two models in 2025.

Electric Car Discount Under Review, 2025

The Australian Centre for Evaluation within Treasury commenced a statutory review of the Electric Car Discount (ECD) in 2025, creating policy uncertainty that is already weighing on fleet purchase decisions. The ECD, an FBT exemption for eligible zero and low emission vehicles below the Luxury Car Tax threshold through novated leases or fleet arrangements, has been in force since July 2022. FCAI and NALSPA credit it with aiding ~100,000 EV purchases. Treasury estimates the programme will cost AUD 23.4 billion in lost revenue if it continues unchanged to the mid-2030s. PHEVs lost ECD eligibility on 1 April 2025.

Australia Electric Vehicle Market Segmentation

Market Breakup by Powertrain

• Battery Electric Vehicles (BEVs): 103,269 units in 2025, 8.3 per cent of the new vehicle market. Tesla Model Y (22,239 units) remains Australia's best-selling individual EV model. The BEV segment is the largest by dollar value in the electric vehicle market.
• Plug-in Hybrid Electric Vehicles (PHEVs): The fastest-growing electrified powertrain in 2025 at 53,484 units (+130.9 per cent). The BYD Shark 6 PHEV ute was the largest-selling PHEV at 18,073 units, demonstrating the technology's applicability to ute-dominant Australia.
• Full Hybrids (HEV, non-plug-in): 199,133 sales in 2025 (+15.3 per cent), making them the most widely purchased electrified technology in Australia. Toyota RAV4 Hybrid and Corolla Cross Hybrid are consistent bestsellers: bridge technology before full EV transition.
• Electric Commercial and Fleet Vehicles: An emerging segment with targeted government support. ARENA committed AUD 25.3 million to NewVolt's electric truck charging network in Melbourne. South Australia received its first 60 electric buses in late 2025, with AUD 150 million allocated for state bus procurement.

Market Breakup by Region

• New South Wales: The largest state by total EV registrations and charging infrastructure, with 357 fast-charging locations. The NSW Government's 2025 EV fleet incentives round extended eligibility to heavy vehicles up to 23 tonnes.
• Victoria: The second-largest electric vehicle market with 311 fast-charging locations. Legislated target: 50 per cent zero-emission new vehicle sales by 2030 and 95 per cent renewable electricity by 2035.
• ACT: The most aggressive state/territory EV target: 80-90 per cent of new vehicles zero-emission by 2030. Leads workplace charging programmes and operates a business EV charger rebate of up to AUD 2,000 per charge point.
• Queensland: Targets 50 per cent ZEV by 2030 and 100 per cent by 2036. Commissioned the most large-scale clean energy projects in Q4 2025.
• Western Australia, South Australia, and Others: WA has no legislated ZEV target but maintains its Charge Up EV Charging Grants. NT scrapped its 50 per cent renewable energy target in March 2025.

Competitive Landscape and Key Players in the Australia Electric Vehicle Market

The Australia electric vehicle market is characterised by a clear split between Chinese-origin brands driving volume and affordability, and established Western and Korean brands holding loyalty in higher price segments. The NVES is accelerating brand entries and model availability.

Tesla

Australia's highest-volume BEV brand in 2025 for the third consecutive year at 28,856 deliveries, despite a 24.8 per cent year-on-year decline. Market share has fallen from 53 per cent in 2023 to 28 per cent in 2025 as Chinese brands expanded. The Model Y remains Australia's best-selling EV at 22,239 units. The Supercharger network, now open to all EVs, remains an important infrastructure asset.

BYD

The most consequential competitive disruptor in the Australia electric vehicle market. BYD's 25,287 BEV units trailed Tesla by just 3,569 in 2025, with 77.3 per cent growth. Total Australian volume including PHEVs (Shark 6 at 18,073 units) reached 52,415. Model range covers affordable hatchbacks through premium sedans and utes. The Atto 1 at AUD 23,990 sets a new affordability benchmark.

Kia and Hyundai

The Korean duopoly is the most credible established non-Chinese competitor to Tesla. Kia's EV5 delivered 4,787 units in 2025 (+687.3 per cent), ranking fourth in BEV model sales. Total Kia BEV volume reached 7,384. Both brands benefit from strong dealer networks and ANCAP five-star safety ratings.

MG Motor and Other Chinese Brands

MG had been the third-largest BEV brand before losing ground in 2025 as newer BYD, Geely, and others entered. Geely's EX5 finished fifth in annual BEV model sales. New entrants Deepal and GAC began or expanded operations. Chinese brands supplied 77.5 per cent of all BEVs sold.

Other significant participants include BMW (i3, i4, iX), Volkswagen Group (ID.4), Volvo (EX30, EX40, EX90), Mercedes-Benz (EQ range), and Polestar (2, 3, 4). Charging infrastructure is led by ChargeFox, Tesla Supercharger, Jolt, Evie Networks, BP Pulse, and NRMA.