Australia’s new vehicle market delivered a solid performance in 2025, with total sales reaching 1,209,808 units, underscoring the sector’s resilience amid changing consumer preferences and accelerating technological shifts.
While overall volumes eased slightly, demand remained robust across key segments as buyers increasingly weighed electrification, practicality and value.
“Consumers are responding to a wide range of models that meet their needs, whether that is family transport, business use or recreation. While overall volumes eased slightly, the market continues to evolve as new technologies become more widely available,” FCAI chief executive Tony Weber said.
The year closed on a positive note, with December 2025 sales rising 3 per cent year-on-year to 98,744 units.
Hybrids surge as EV growth lags
Electrified drivetrains continued to reshape the market, led by a sharp rise in plug-in hybrid vehicles. Sales more than doubled in 2025, jumping 130.9 per cent to 53,484 units — the strongest growth of any drivetrain category.
Conventional hybrids also gained ground, with 199,133 vehicles sold, up 15.3 per cent year on year, cementing their position as the most popular lower-emissions option for Australian buyers.
“Many consumers are choosing hybrid and plug-in hybrid vehicles as a practical transition toward lower emissions. While the industry is investing heavily in battery electric technology, uptake ultimately depends on consumer readiness and the availability of reliable public recharging infrastructure,” Mr Weber said.
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Battery electric vehicle (BEV) sales totalled 103,269 units, accounting for 8.3 per cent of the market. Despite more than 100 BEV models now available, growth has been slower than anticipated.
“The growth of battery electric vehicle market share has been anaemic, increasing by 1.1 percentage points over the past two years, well below earlier projections,” Mr Weber said.
BYD accelerates into the mainstream
One of the standout stories of 2025 was the rapid rise of BYD. The Chinese brand delivered a record 52,415 vehicles, up 156 per cent on 2024, propelling it to eighth overall in the Australian market.
The SHARK 6 dual-cab ute and fully electric SEALION 7 SUV underpinned the surge, attracting more than 31,000 customers combined in their first year.
“BYD’s growth has been genuine, driven by great quality vehicles with world-leading battery-electric powertrains, unmatched style and comfort, and at prices suited to Australian families and younger buyers looking to purchase their first new energy vehicle,” BYD Australia COO Stephen Collins said.
With China accounting for around 18 per cent of all new vehicle sales in 2025, and hybrids and EVs firmly embedded in buyer consideration, Australia’s automotive market appears set for continued evolution in the years ahead.
Policy settings under the spotlight
The industry continues to adjust to the New Vehicle Efficiency Standard (NVES), which came into effect last year. While early compliance results are yet to be released, concerns are growing about longer-term impacts.
“The NVES has provided policy certainty and has led to an increased availability of EVs in Australia. However, it has had little discernible effect on EV demand,” Mr Weber said.
Attention has also turned to the review of Fringe Benefits Tax concessions, with international examples highlighting the link between incentives and EV uptake.
“Countries such as Germany, the Netherlands, New Zealand and the United States have seen sharp declines in EV sales when incentives were reduced or removed,” Mr Weber said.