Electric vehicles and hybrids are no longer a niche part of the Australian car market.
According to the latest VFACTS and Electric Vehicle Council (EVC) data, electrified vehicles accounted for nearly half of all new vehicle sales in May 2026, marking another major milestone in the shift away from traditional petrol and diesel vehicles.
The result highlights how quickly buyer preferences are changing as more drivers compare fuel costs, vehicle ownership expenses and long-term affordability.
Electrified Vehicles Now Represent Nearly Half the Market
May delivered one of the strongest results ever recorded for electrified vehicles.
Battery electric vehicles, hybrids and plug-in hybrids combined represented approximately 46.4% of all new vehicle sales during the month. At the same time, battery-electric vehicles alone reached a record market share of 19.9%.
Just a few years ago, these figures would have seemed unlikely.
Today, buyers have access to:
- more EV models
- more hybrid options
- longer driving ranges
- improved charging infrastructure
- lower running costs
This combination is making electrified vehicles a more realistic option for a growing number of drivers.
Fuel Prices Continue Driving Interest
One of the biggest drivers behind the shift appears to be fuel costs.
With global oil prices remaining elevated and fuel price pressures continuing throughout 2026, many Australians are reassessing the long-term cost of vehicle ownership.
Instead of focusing solely on the purchase price, buyers are increasingly comparing:
- fuel versus charging costs
- servicing expenses
- maintenance requirements
- total ownership costs
This is one reason many employees are now choosing to calculate your savings before deciding between petrol, hybrid and electric vehicles.
Tesla, BYD and Chinese Brands Continue Growing
The latest figures also highlight the growing influence of EV-focused manufacturers and Chinese automotive brands.
Tesla recorded a record month, while BYD continues strengthening its position in the local market. Chinese-built vehicles now account for a significant share of new vehicle sales as buyers seek greater value and more electrified options.
As competition increases, consumers are benefiting from:
- wider model choice
- improving technology
- more competitive pricing
- faster EV adoption
Comparison Table: How the Market Is Changing
| Vehicle Type | Market Trend in 2026 | Key Driver |
|---|---|---|
| Petrol Vehicles | Declining share | Rising fuel costs |
| Diesel Vehicles | Gradual decline | Changing buyer preferences |
| Hybrid Vehicles | Strong growth | Lower fuel consumption |
| Plug-In Hybrids | Growing adoption | Greater flexibility |
| Battery Electric Vehicles | Record market share | Running cost savings and incentives |
What This Means for Car Buyers
The growing popularity of electrified vehicles is changing how buyers compare ownership costs.
More drivers are now looking beyond monthly repayments and evaluating:
- running costs
- fuel savings
- charging expenses
- servicing requirements
- salary packaging opportunities
For employees exploring vehicle ownership through salary packaging, an EV novated lease can provide a structured way to bundle vehicle expenses into one arrangement.
Many buyers also compare an EV vs petrol cost breakdown under a novated lease before making a final decision.
The Global Trend Is Continuing
Australia is not alone.
Globally, electric vehicle adoption continues to accelerate.
The International Energy Agency estimates that EVs represented approximately 25% of all new vehicle sales worldwide in 2025 and could approach 30% of new vehicle sales in 2026.
As battery costs continue falling and more models enter the market, many analysts expect electrified vehicles to capture an even larger share of future vehicle sales.
Why More Buyers Are Running the Numbers First
With vehicle ownership costs evolving quickly, many drivers are choosing to model different scenarios before purchasing.
Rather than relying on assumptions, buyers can compare:
- vehicle repayments
- fuel costs
- charging expenses
- salary packaging outcomes
- long-term ownership costs
Many employees now run your numbers before deciding whether a petrol, hybrid or electric vehicle makes the most financial sense.
For buyers new to salary packaging, understanding how a novated lease works can also help when comparing ownership structures.
Final Thoughts
The latest VFACTS and EVC data confirms that electrified vehicles are becoming a mainstream part of the Australian automotive market.
With nearly half of all new vehicle sales now involving some form of electrification, the conversation is shifting from “Should I consider an EV?” to “Which electrified vehicle best suits my needs?”
As ownership costs, fuel prices and technology continue evolving, more buyers are likely to compare electric, hybrid and petrol vehicles side by side before making their next purchase.
Frequently Asked Questions
Why are EV sales increasing?
Rising fuel costs, improved vehicle availability, lower running costs and expanding model choices are all contributing to growing EV adoption.
Are hybrids still popular?
Yes. Hybrid vehicles continue to play a major role in the market and contribute significantly to overall electrified vehicle sales.
How do buyers compare EV ownership costs?
Many buyers compare charging costs, servicing expenses, vehicle repayments and ownership costs before choosing a vehicle.
Can salary packaging be used for electric vehicles?
Eligible employees may be able to package an EV through a novated lease arrangement, depending on their circumstances.
Are EV sales expected to keep growing?
Global forecasts suggest EV adoption will continue increasing as more vehicles become available and ownership costs improve.
