Electric Vehicle sales stumble in Australia despite cheaper Chinese imports and hybrid surge
Sales of new vehicles in Australia depict a clouded and muted picture. The market has faced its seventh decline in the last eight months, with February sales down 7.9 per cent compared to the same period last year. However, it’s important to note that the February 2025 figures represent the second highest February volume on record, surpassed only by last year.
Sales for the calendar year to date (two months) are down 5.4 per cent to 184,335. Breaking down that number, we see petrol vehicle sales dropped 13 per cent to 40,496, and diesel sales decreased 16.1 per cent to 26,863. Meanwhile, petrol-electric hybrid sales surged 34.7 per cent to 15,348.
Battery electric vehicles (BEVs), however, plunged 43.8 per cent to 5,684, thanks primarily to Tesla sales collapsing 71.9 per cent. Plug-in hybrid electric vehicles (PHEVs), on the other hand, surged 346.1 per cent to 4,871, thanks to the BYD Shark 6, of which 2026 units were sold.
Table 1. reveals the 10 best-selling models in Australia are SUVs and the enduring popularity of utes like the Ford Ranger (4,040 sales) and Toyota HiLux (3,616 sales), suggest that consumer preferences for practical, versatile vehicles may not yet align with the electric vehicle (EV) offerings.
Table 1. Australia’s top 10 selling passenger vehicles, February 2025
Of the 1358 medium-sized passenger cars sold in February, 884 were EVs, outselling their internal combustion engine (ICE) equivalents. Despite Tesla’s slump, it still managed to outsell Toyota’s Camry, which saw sales slump 68.9 per cent compared to February 2024.
Interestingly, the slowdown in Australia’s EV market so far this year defies the influx of affordable Chinese-made models and a robust increase in hybrid vehicle sales. Despite a growing range of EV options and significant price cuts, consumer enthusiasm for fully electric cars continues to diminish, while hybrids and plug-in hybrids (PHEVs) are capturing an increasingly larger share of the new technology segment of vehicle sales.
The latest data, however, from the Federal Chamber of Automotive Industries (FCAI) and the Electric Vehicle Council (EVC) indicates that EV sales in Australia have encountered a rough patch. In February, only 5,592 battery electric vehicles were sold, making up just 5.9 per cent of the total new vehicle market – a significant drop from 9.6 per cent in February 2024. The figures for January were even poorer, with EVs accounting for merely 4.4 per cent of the 87,625 vehicles sold, down from 5.5 per cent a year earlier. This decline is noteworthy given the availability of 88 EV models, supported by cheaper imports from Chinese manufacturers like BYD and MG, which have driven prices as low as $29,990.
The slump in EV sales stands in sharp contrast to the booming popularity of hybrid vehicles, which now command 16 per cent of the new car market with 15,348 units delivered – representing nearly one in six new vehicles. Plug-in electric hybrid vehicles (PHEVs), are gaining traction at 2.2 per cent of sales after a remarkable 222 per cent increase year-on-year, reaching 4,871 units.
Toyotas continue to dominate in the hybrid segment, with models like the RAV4 (4,378 sales) and Corolla (1,515 sales) leading the charge, alongside the standout performance of BYD’s Shark 6 PHEV ute, which alone accounted for nearly 60 per cent of PHEV sales in February and now ranks as the sixth or seventh most popular model overall despite only first becoming available for sale in recent months
The dramatic decline in battery electric vehicles (BEVs) is heavily influenced by faltering Tesla sales, the former pacesetter in Australia’s electric transition. Tesla deliveries plummeted 72 per cent in February, dropping to 1,592 vehicles from 5,665 a year earlier, following a 33 per cent slide in January.
The decline for Tesla reflects growing consumer unease with Tesla founder Elon Musk’s polarising political alignment with U.S. President Donald Trump, in addition to the general malaise EVs are experiencing. The sentiment is echoed by a 50 per cent drop in Tesla’s share price since its highs in December.
Meanwhile, cheaper Chinese EVs aren’t igniting the EV market as much as expected. BYD, the Chinese contender challenging Tesla, saw its Australian sales soften, with the Atto 3 registering just 105 units and the Seal only 52 in January. Even the popular Sealion 6 PHEV, despite 433 sales, fell short of its 2024 monthly average of 1,000.
In a softer market for vehicles overall, it seems consumers are less inclined to buy an EV.
Despite the EV slump, some see hope on the horizon. Price cuts and new models – especially those able to receive a 400-plus kilometre charge in five to ten minutes – are being cited as reasons to expect a rebound. However, for now, the Australian market is sending a clear message: while cheaper Chinese EVs are lowering the entry barrier, and hybrids are thriving, pure-battery electric vehicles are struggling to maintain their charge.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
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