Record EV and hybrid sales surge as Australians seek relief from high fuel costs

Sustained fuel price pressures have driven Australians to replace petrol cars with electric and hybrid models, resulting in record sales where almost one in two vehicles sold in the April-June period were EVs or hybrids and fully electric cars grew to a fifth of new registrations. The shift, fueled by environmental concerns, improved EV reliability and government purchase subsidies, has boosted household spending and increased vehicle inventories, nudging quarterly GDP growth slightly above expectations.

However, the inventory buildup was not enough to offset a drawdown in mining stocks, which subtracted from growth, while rising EV imports reduced net trade’s contribution. Gains in coal exports and modest government spending helped balance the overall impact, but the combination of stronger household demand and persistent inflation may keep the Reserve Bank wary. Over the longer term, broader solar adoption and continued EV uptake could lower energy costs and provide a buffer against global oil price shocks, even as short-term price pressures remain.