Australia’s new car market experienced a significant downturn in February 2025, with total sales reaching 94,993 vehicles—a 9.6% decline compared to the same month in 2024. The fall in consumer demand is attributed to ongoing cost-of-living pressures, despite an increase in the availability of battery electric vehicles (BEVs).
Market Breakdown by Buyer Type
The sales decline was felt across all buyer segments, with private buyers leading the drop:
- Private buyers: 48,958 vehicles (-12.2% YoY)
- Business buyers: 35,662 vehicles (-3.9% YoY)
- Government buyers: 2,652 vehicles (-17.4% YoY)
- Rental companies: 4,273 vehicles (-16.3% YoY)
The decrease in private sales is particularly concerning, as these buyers are critical for long-term market stability. Business purchases held up relatively well, likely due to ongoing fleet renewal needs.
Sales by Vehicle Category
SUVs remained dominant, comprising 60.4% of total sales, while passenger cars continued to lose market share:
- SUVs: 57,421 (-0.6% YoY)
- Light Commercial Vehicles: 21,337 (-10.2% YoY)
- Passenger Vehicles: 12,787 (-34.8% YoY)
- Heavy Commercial Vehicles: 3,448 (-10.9% YoY)
The shift away from traditional passenger cars highlights an ongoing preference for larger vehicles, despite economic concerns.
Top-Selling Brands and Models
Toyota maintained its market leadership with 18,832 sales, ahead of Mazda (8,797) and Ford (6,337). Kia (6,707) and Mitsubishi (6,119) rounded out the top five.
The Toyota RAV4 was Australia’s best-selling vehicle, with 4,405 sales, while the Ford Ranger and Toyota HiLux continued to battle in the ute segment, recording 4,040 and 3,616 sales, respectively.
Sales by Fuel Type: Declining BEV Market
One of the most concerning trends in February was the sharp decline in battery electric vehicle (BEV) sales, despite an increase in model availability. EVs accounted for only 5.9% of total sales, a substantial drop from 9.6% in February 2024—a 37% drop in consumer demand for EVs over the first two months of 2025.
Fuel-type breakdown:
- Petrol vehicles: 40,496 (-13.0% YoY)
- Diesel vehicles: 26,863 (-16.1% YoY)
- Battery Electric Vehicles (BEVs): 3,967 (-60.8% YoY)
- Hybrids: 15,348 (+34.7% YoY)
- Plug-in Hybrids (PHEVs): 4,871 (+346.1% YoY)
While BEV adoption slowed, hybrid and PHEV sales increased sharply as the March 31st deadline to take advantage of the FBT Exemption approaches.
Industry Concerns Over New Vehicle Efficiency Standards
The Federal Chamber of Automotive Industries (FCAI) expressed concerns over the New Vehicle Efficiency Standard (NVES), which came into effect in 2025. FCAI CEO Tony Weber noted that while EV supply has risen to 88 models available in Australia, demand has not followed suit. He criticised the government for keeping its EV adoption assumptions “secret,” warning that the NVES might not achieve its goals if consumer sentiment does not improve.
Looking Ahead
The February sales results highlight the challenges facing the Australian automotive industry. While government policies encourage a shift towards electric mobility, consumer demand is lagging, likely due to financial pressures and infrastructure limitations. The strong hybrid and PHEV growth suggests that buyers are seeking a middle ground rather than fully committing to BEVs.
With economic uncertainties persisting, it remains to be seen whether EV incentives or broader affordability improvements will drive a turnaround in consumer sentiment. Meanwhile, fleet buyers and businesses continue to underpin the market, providing some stability in the face of declining private sales.
