Australia Records Largest-Ever Quarterly Surge in Electric Vehicle Sales

Australia has recorded its most significant quarterly surge in electric vehicle (EV) sales, with new EV purchases doubling in the three months leading up to June 30. Updated figures reveal that nearly one in every two new vehicles sold during this period was either fully electric or a hybrid model. This dramatic increase coincides with a sharp rise in fuel prices that began in early April, following the war in Iran and the closure of the Strait of Hormuz in late February.

Data from the Australian Automobile Association shows a substantial jump in the market share for fully electric vehicles, which rose from 12.25% to over 21% within six months. This marks the first time fully electric vehicles have outsold hybrid EVs, even though hybrids also achieved their second-highest market share on record. Conversely, the market share for non-electric vehicles saw a significant decline, falling to 50.84% of sales in the June quarter, down from 64.23% in the previous period.

Deputy Liberal leader Jane Hume commented on the figures, suggesting that government subsidies for EVs are no longer required. "I think that's the market speaking with its feet, and probably why we don't necessarily need more subsidies on electric vehicles," she stated. Hume criticized the current government's subsidy program, calling it "out of control" and increasingly costly for Australians.

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I think that's the market speaking with its feet, and probably why we don't necessarily need more subsidies on electric vehicles.

In response to the growing EV market, the federal government announced in May's budget a phased reduction of its generous tax discounts designed to encourage EV adoption. This policy is expected to save $1.7 billion over four years. Introduced at the start of 2023, the tax exemption initially made EVs thousands of dollars cheaper by exempting them from fringe benefits tax. The program, initially projected to cost $605 million over seven years, significantly exceeded expectations, costing taxpayers over $1 billion.

Starting April next year, the tax exemption will continue for EVs under $75,000, while vehicles above this threshold will receive a 25% discount on the fringe benefits tax. By April 2029, all EVs below the luxury car tax threshold will receive a 25% tax discount. Climate Change Minister Chris Bowen previously indicated the discount was being phased out because it had successfully stimulated EV uptake, driving investment in charging infrastructure. As more Australians embrace EVs, car dealers are urging the federal government to update Australian Consumer Law to better protect consumers purchasing EVs from overseas manufacturers.

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Unfortunately, the subsidy program that's been run by this government has run out of control, and it's costing Australians more and more.