2024 saw a massive shakeup as pure EV sales softened (only growing 4% last year) but on the flipside, sales of Plugin Hybrid Electric Vehicles (PHEVs) boomed as Australian consumers choose the ‘best of both worlds’
Leading this charge is BYD, where over 60% of their sales are PHEVs notably the the Sealion 6 and the Shark 6, the former having overtaken long-time #1 PHEV the Mitsubishi Outlander.
While Australia’s significant surge in the adoption of Plug-in Hybrid Electric Vehicles (PHEVs) reflects a broader global movement towards sustainable transportation, with PHEVs offering a balanced solution between traditional internal combustion engines and fully electric vehicles.
But the government incentives have played a huge role in turbo-charging this shift.
The Fringe Benefits Tax (FBT) exemption for Plug-in Hybrid Electric Vehicles (PHEVs) under novated leasing has played a crucial role in boosting PHEV sales in Australia. Introduced as part of the government’s push for cleaner transport, this exemption significantly reduces the cost of leasing a PHEV through salary packaging, making them a more attractive option for employees.
Since the exemption allows drivers to pay for their PHEV using pre-tax income, it has effectively lowered the total cost of ownership, increasing affordability. This financial incentive has contributed to a surge in PHEV adoption, particularly among corporate and fleet buyers.
Sales Growth and Market Share
The PHEV market in Australia has experienced remarkable growth. From January to September 2024, PHEV sales increased by 120.5% compared to the same period in the previous year, outpacing the growth of standard hybrids and electric vehicles. By the end of 2024, PHEV sales had doubled, reaching 23,163 units, highlighting the escalating consumer interest in this vehicle segment.
Factors Driving Popularity
Several factors contribute to the rising popularity of PHEVs in Australia:
- Fuel Efficiency and Cost Savings: PHEVs offer improved fuel efficiency by combining electric and petrol power, leading to reduced fuel consumption and cost savings for drivers.
- Environmental Concerns: With growing awareness of environmental issues, many consumers are opting for PHEVs as a more eco-friendly alternative to traditional vehicles, contributing to lower greenhouse gas emissions.
- Government Incentives: Various government incentives, such as tax concessions and subsidies, have made PHEVs more financially accessible to consumers. These incentives have played a crucial role in encouraging the adoption of PHEVs across the country.
- Infrastructure Readiness: Unlike fully electric vehicles, PHEVs are less dependent on charging infrastructure, alleviating concerns about charging station availability, especially in regional and rural areas. This makes them a practical choice for many Australians.
Market Leaders and New Entrants
The Mitsubishi Outlander PHEV has long been a leader in the Australian market, benefiting from its early entry and the popularity of the mid-size SUV segment. However, in 2024, the BYD Sealion 6 surpassed the Outlander, becoming the top-selling PHEV despite only being introduced in June of that year. This shift indicates a dynamic market with increasing competition and consumer openness to new brands.
| Year | Total Sales | ICE Sales | EV Sales | PHEV Sales |
|---|---|---|---|---|
| 2020 | 916,968 | ~910,000 | ~5,292 | ~1,426 |
| 2021 | 1,049,831 | ~1,030,000 | ~5,215 | ~1,685 |
| 2022 | 1,081,429 | ~1,040,000 | ~33,410 | ~5,937 |
| 2023 | 1,081,429 | ~983,000 | ~87,217 | ~11,212 |
| 2024 | 1,220,607 | ~898,820 | ~91,000 | ~23,163 |
Notes:
- Total Sales: Reflect the overall new vehicle sales in Australia for each year. See https://www.fcai.com.au/get-vfacts/
- ICE Sales: Estimated by subtracting the combined EV and PHEV sales from the total sales.
- EV Sales: Data sourced from industry reports and may exclude certain brands in specific years.
- PHEV Sales: Figures are approximate and derived from available industry data.