For many years, the affordability of electric vehicles has been one of the biggest stumbling blocks to the energy transition.

Critics branded them an elitist fantasy, consumers opted for cheaper upfront petrol and diesel alternatives, and overall EV adoption remained niche.

But things have changed dramatically this year, with the cheapest EVs coming to Australia costing just $26,000 (about the same as petrol).

So, with over 150 options and cheaper electric cars available than ever before, why is Australia still lagging behind the rest of the world?

EVs have become much cheaper

There are EVs in every category, and prices are falling across the board. Hussein Dia, professor of transport and sustainability at Swinburne University, says they are no longer considered a luxury.

“There has been an influx of cheaper models, particularly from China, over the last year, which has helped. Australia is now gradually moving from being an early adopter to, hopefully, mainstream consideration.”

Professor Dear said the price of EVs is approaching that of non-electric vehicles.

“If you were talking about this three years ago or two years ago, you wouldn’t have found EVs that cost $50,000 to $60,000. Now they’re down to the $30,000 range, and we expect more EVs to come to market.”

Tim Washington, CEO of Australian charging company JetCharge, said buyers were still focused on upfront costs rather than considering long-term prices.

With lower maintenance costs and the option of charging with very cheap daytime solar power, electric cars are already overwhelming fuel cars in terms of running costs.

“when [people] When you go buy a car, they look at the sticker price if they want to… We’re finally at the point where electric cars are parity at the upfront price level. ”

Sales of electric vehicles are trending strongly worldwide. China’s electrification boom Reduced the cost of EVs. EVs accounted for more than a quarter of global new car sales from January to October last year, up from less than 3% in 2019, according to analysis by energy think tank Ember.

Australia loves SUVs and trucks.

Small EV prices are reaching parity, but Australians love SUVs and trucks.

If you thought there were suddenly a ton of dual-cap BYDs out there, you wouldn’t be wrong.

According to JetCharge research, utes were the second-largest segment to see increased EV sales, with BYD’s Shark the fourth-best-selling ute overall.

Mid-size electric SUVs accounted for the majority of EV sales in Australia in 2025, despite their luxury offerings. Electric models now account for more than a quarter of sales in the segment, up from just 16% in 2024.

“Mid-size SUVs are skyrocketing in popularity and make up a large portion of EV sales. The reality is that people are buying very large vehicles,” Washington said.

Tesla Model Y, BYD’s Sealion 7, and Kia’s EV5 were the best sellers. According to car news and reviews website Car Expert.

As more EVs are sold in Australia, a growing second-hand market will also help reduce costs.

“I think one of the things that is being ignored is how much choice and value is flowing into the used market, which is where most Australians buy their cars.

“In fact, I think buying a used electric car is one of those great deals that is often overlooked because it’s not as cool as a new car.”

Hybrid and EV sales rate

2025 was a record year for electric vehicle options in Australia, with the biggest growth coming from hybrid options.

Plug-in hybrid EVs (PHEVs) have a fuel-burning internal combustion engine and an electric motor that runs on power from a rechargeable battery.

A study last year of hundreds of thousands of PHEVs found that because most users don’t regularly charge their batteries, the vehicles’ emissions are about the same as gasoline cars.

Professor Deer said hybrid cars were more popular than initially expected, but still did not offer the same decarbonization benefits as electric cars.

“They are eating away at the gasoline market and I think that’s a good story… but ultimately I would like to see more of a transition to battery electric, similar to what’s happening in the Nordic countries and China,” he said.

“Anxiety about cruising range” and anxiety about charging

Despite a booming electricity market, last year’s sales data showed Australia was below the global average and far behind its peers.

Looking back, Professor Deer said, “We started from the back. We’re still behind, but it looks like we’ve got some good momentum.”

Some of the issues that keep drivers away from electric cars, such as range concerns and charging infrastructure, are improving as technology advances.

Electric cars currently sold in Australia have a range of up to 750 kilometers (as with all advertised ranges, this depends on driving conditions), but at a much higher price.

For most commuters, Washington says, many of those concerns disappear once drivers buy their first electric vehicle.

“Data shows that the majority of people who worry about range anxiety, charging anxiety, and plugging in are people who don’t drive an EV.

“And I think a lot of the research that’s coming out about people’s anxiety and the likelihood of buying an electric car is also problematic because for a lot of people, it comes from experiences that haven’t been lived.”

On average, Australians drive around 12,000km a year, or 33km per day. This means that many drivers can simply plug their car into a standard Power Point (sometimes called a grandma’s charger, as it’s the slowest charging option) every night and charge it that way.

”[For] If you live in a house or private residence with a private driveway, it will be easier to charge. And if you have things like solar cells and batteries, it’s going to be very cheap,” Professor Deer said.

While home charging is easy in rural and suburban areas, they often don’t have the same facilities as public chargers, which are essential for long road trips.

“If you’re in Australia’s metropolitan areas, you’re very well served. The problem is when you go outside of those areas… there are charging deserts all over the country.

“It should be equal for everyone, including people who live in rural areas. I think they will be happy to move to EVs, but they need to have the confidence to do so.” [that] They are treated equally as people living in densely populated areas. ”

The longer Australia delays the rollout of electric vehicles, the greater the challenge it will be to meet the country’s climate change targets. The Climate Change Agency says half of all new cars sold in Australia over the next 10 years need to be electric to meet the 2035 target.

Transport is set to become Australia’s largest emitter as emissions decline across the electricity sector due to the rise of renewable energy.

“On average, our CO2 emissions per kilometer have actually increased as a country over the past few years. I think the price parity of the upfront costs makes it the perfect time to reduce our CO2 emissions,” Washington said.

“If we don’t move to electric vehicles, we have no chance of reducing transportation emissions to zero.”

What will 2026 bring?

Recognizing the growing climate challenge in transportation, the federal government National Vehicle Efficiency Standards (NVES) to force automakers to introduce more low-emission options To the Australian market.

of Results from the first year Several major automakers will face multimillion-dollar fines if they don’t start selling more efficient cars in the next few years.

Currently, the government continues to offer tax breaks to people who take out EV renewal leases. But it’s something to consider.

Mr Washington and Professor Deer expressed concern that if the plan were scrapped, the uptake of EVs would stall.

“We know that FBT exemptions are one of the key drivers of EV adoption at this time,” Washington said.

“In two other jurisdictions, they tried [wind it back] In Germany and Canada, they actually reinstated it two years later because they saw subsidies being removed abruptly, rather than being phased out according to a target or letting people know they would have to intervene again. ”

Professor Deer suggested that the program should be scaled back once the EV penetration target is reached.

The enthusiasm surrounding home battery adoption since the federal government provided generous subsidies shows that consumers are willing to invest in clean technology when the personal benefits are clear.

Under the scheme, Australian households installed as many batteries in the last six months of 2025 as they had installed in the entire previous five years.