Sales of electric and hybrid vehicles are surging despite the decline in new car sales, according to IBISWorld.
A recent influx of electric vehicles has hit the Australian market, including the hybrid Toyota RAV4 and Corolla along with the hybrid Mitsubishi Outlander. Hyundai and Jaguar have also launched ranges of fully electric cars.
In August, US-based Tesla launched its Model 3 electric vehicle in the Australian market. The car manufacturer has delivered an estimated 2400 Model 3s in its first two months on the market, more vehicles than the company sold in all of 2017 and 2018 combined.
“Increased availability, along with consumer concerns regarding fuel costs and the environment, has contributed to year-on-year sales of electric vehicles almost doubling between 2018 and 2019,” said IBISWorld Senior Industry Analyst James Caldwell.
Market polarisation
The surge in electric vehicle sales over the past year has done little to reduce Australians’ preference for fast, heavy cars. Sales of large passenger vehicles such as SUVs continue to dominate new car sales. Australia’s bestselling car remains the Toyota HiLux SUV.
Decrease in new car sales
Sales of new cars have declined though. According to industry research firm IBISWorld, declining property prices across many of Australia’s major cities and falling discretionary incomes have led consumer confidence to become negative. Consequently, consumers are feeling less optimistic about their finances and are increasingly delaying purchasing new cars.
The industry is also contending with tightened lending regulations due to the fallout from the Financial Services Royal Commission. Overall, sales of new passenger vehicles are expected to fall at an annualised 0.4 per cent over the five years through 2018-19.
