The surprise choice for new car buyers ahead of Labor's punishing emissions tax crackdown

•  Hybrids are now outselling fully-electric cars
• A year ago, EVs outsold petrol-electric hybrids 
• READ MORE: Why Chinese EVs are security threat 

Australians are flocking to hybrid cars over fully-electric vehicles ahead of Labor’s upcoming emissions crackdown which could see prices soar.

One in seven of new cars sold in Australia in March were petrol-electric hybrid cars, surging ahead of fewer than one in ten battery-electric vehicles.

New data from the Federal Chamber of Automotive Industries on Thursday showed a dramatic reversal from a year ago when battery EVs easily outsold hybrids.

A year ago, battery EVs were comfortably outselling hybrids, with a 6.8 per cent market share compared with 6 per cent for hybrids and plug-in hybrids.

Hybrids made up 14 per cent of all new car sales last month, while EVs were just 9.5 per cent.

The surge in hybrid sales came after Climate Change and Energy Minister Chris Bowen in February revealed the New Vehicle Efficiency Standard (NVES), which aims to discourage sales of cars with petrol or diesel engines, including hybrids.

The dramatic rise in hybrid sales helped make the Toyota RAV4 SUV –  available as a hybrid but not as a full EV in Australia – the nation’s second bestselling car in March.

The soaring sales put it ahead of the fully-electric, zero emission Tesla Model Y, which dropped to third place, but behind the diesel Ford Ranger ute in the No.1 spot.

Australians are flocking towards hybrid cars instead of fully-electric vehicles despite Labor’s upcoming emissions crackdown (pictured is a Toyota RAV4 with a hybrid motor)

But even the current RAV4 hybrid, which emits 107 grams of carbon per kilometre, would still be above Labor’s proposed NVES proposed emissions limit.

The NVES will impose penalties on car makers if average emissions for their new fleet exceed 92 grams of CO2 per kilometre by 2027.

The government’s plan, due to come into effect on January 1, 2025, aims to cut average passenger vehicle carbon emissions to 58 grams of carbon per kilometre by 2029.

This would mark a 59 per cent reduction from the 2025 target of 141 grams per kilometre as part of Labor’s plan to reduce carbon emissions by 43 per cent by 2030.

No single petrol, diesel or hybrid car on sale now would meet that goal, with car manufacturers fined $100 for every gram, on average, their new fleet went above a specified threshold.

The Federal Chamber of Automotive Industries estimates this would add $2,720 to the price of a petrol-powered RAV4 but could make a hybrid version up to $3,840 cheaper.

This would see costs passed on to consumers but it would reward EV makers who could sell carbon credits to their rivals, with scheme expected to reduce the price of a Tesla Model Y by $15,390.

But a diesel-powered Toyota LandCruiser would be $13,250 more expensive as a vehicle that emits more than 200 grams of CO2 per kilometre, FCAI calculations showed.

FCAI chief executive Tony Weber, whose group has lost the support of EV makers Tesla and Chinese-owned Volvo subsidiary Polestar, said car makers would struggle to adapt to Labor’s efficiency standard.

Petrol-electric hybrid cars had a 14 per cent market share in March, compared with 9.5 per cent for EVs, new Federal Chamber of Automotive Industries data released on Thursday showed (pictured is a fully-electric Tesla Model Y)

AUSTRALIA’S BESTSELLING CARS

1.  FORD RANGER: 5,661 sales, up 25.6 per cent with a year ago

2. TOYOTA RAV4: 5,070 sales, up 185.2 per cent on a year ago

3. TESLA MODEL Y: 4,379 sales, up 126 per cent on a year ago

4. TOYOTA HILUX: 3,995 sales, down 12.8 per cent on a year ago

5. MITSUBISHI OUTLANDER: 2,764 sales, up 27.4 per cent on a year ago

6. ISUZU D-MAX: 2,465 sales, down 11.6 per cent on a year ago

7. FORD EVEREST: 2,264 sales, up 129.8 per cent on a year ago

8. NISSAN X-TRAIL: 2,161 sales, up 124.4 per cent on a year ago

9. TOYOTA LANDCRUISER: 2,159 sales, up 28.3 per cent on a year ago

10. MAZDA CX-5: 2,134 sales, up 11.3 per cent on a year ago

Source: Federal Chamber of Automotive Industries sales data for March 2024

‘A fuel efficiency standard is long overdue. However, we remain concerned at the speed and magnitude of the change for both manufacturers and more importantly, consumers,’ he said.

‘The car makers will respond, however it will take time to develop new products, especially in the large SUV and light commercial segments, that meet expectations in terms of price, performance and emissions, noting these vehicles make up more than one third of new vehicle sales in Australia.’

SUV, or cars with higher ground clearance and four-wheel drives, had 56.6 per cent market share during the first three months of 2024, with 172,234 sold out of 304,452.

Among the top 10, SUVs had six places including the Toyota RAV4 in second place with 5,070 sales, the Mitsubishi Outlander in fifth spot with 2,764 sales, the Australian-designed Ford Everest in seventh position with 2,264 sales, the Nissan X-Trail in eighth place with 2,161 sales, the larger Toyota LandCruiser in ninth spot with 2,159 sales and the Mazda CX-5 in tenth rank with 2,134 sales.

The surge in hybrid sales has occurred despite Climate Change and Energy Minister Chris Bowen in February revealing a New Vehicle Efficiency Standard (NVES) designed to discourage sales of cars with a petrol or diesel engine, including hybrids (he is pictured right with Mitsubishi Australia chief executive Shaun Westacott)

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