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Australia’s transport sector is one of the country’s fastest growing sources of greenhouse gas emissions.
Electric and hybrid vehicles are often presented as an obvious solution, yet their real climate value depends on electricity generation, manufacturing emissions, and how quickly the national fleet actually changes.
Australia’s car fleet is large, old and geographically dispersed, raising questions about whether electrification can deliver meaningful emissions cuts this decade.
New vehicle sales are changing quickly, but the vehicles already on the road turn over slowly.
At the same time, Australia’s electricity grid is decarbonising, but fossil fuels still supply a substantial share of power.
These factors complicate claims that electric vehicles automatically solve transport emissions.
This investigation examines whether electric and hybrid vehicles genuinely reduce climate change in the Australian context.
It analyses fleet data, lifecycle emissions, charging infrastructure, grid impacts and policy settings.
The evidence shows progress, limits, and risks that policymakers must confront now. (BITRE)
Australia’s vehicle fleet and why percentages matter
As at 31 January 2025, Australia had about 22.3 million registered motor vehicles, according to the Bureau of Infrastructure and Transport Research Economics (BITRE)[2].
Passenger vehicles accounted for about 16.1 million of these, while light commercial vehicles such as utes and vans added another 4.2 million.
Together, these categories form a light vehicle fleet of about 20.3 million vehicles.
This is the most relevant base for assessing the climate impact of electric and hybrid vehicles.
Using this denominator avoids overstating progress by focusing only on new sales.
How many electric and hybrid vehicles are on Australian roads
BITRE data show around 259,700 battery electric vehicles registered nationally as at January 2025[2].
This represents about 1.28 percent of Australia’s light vehicle fleet.
Conventional hybrid electric vehicles numbered about 709,100, equivalent to roughly 3.5 percent of light vehicles.
Plug in hybrid vehicles are not separately enumerated in BITRE’s national registration tables.
This lack of disaggregated data limits precise assessment of their fleet share and emissions impact.
Even when battery electric and conventional hybrids are combined, fewer than 5 percent of light vehicles use electric drivetrains.
The overwhelming majority of vehicles on Australian roads still rely solely on petrol or diesel.
Sales momentum versus slow fleet turnover
New vehicle sales tell a very different story from fleet composition.
Battery electric vehicles accounted for about 13 percent of new passenger vehicle sales in 2024, according to the National Transport Commission[6].
Hybrid vehicles captured an even larger share of new sales, driven by fuel savings and lower upfront costs.
Despite this momentum, Australia’s average vehicle age exceeds 10 years.
Slow turnover means emissions reductions lag behind sales trends.
Policies that focus only on new vehicles risk overstating near term climate benefits.
Do electric vehicles reduce emissions on Australia’s grid
Lifecycle emissions include vehicle manufacturing, fuel or electricity use and end of life impacts.
Australian studies consistently find that battery electric vehicles produce lower lifecycle emissions than comparable petrol vehicles, even on the current grid[1].
The Electric Vehicle Council estimates that a medium electric car in Australia produces around 30 to 40 percent fewer emissions over its lifetime than a petrol equivalent.
As renewable energy expands, this advantage increases.
Manufacturing emissions for electric vehicles are higher, mainly due to batteries.
These emissions are typically offset after several years of driving.
Hybrids also reduce emissions compared with conventional vehicles, but by a smaller margin.
Electricity generation and future benefits
Australia’s electricity sector is undergoing rapid change.
Renewables now supply more than one third of national electricity generation, according to the Australian Energy Market Operator[7].
Coal still plays a major role, particularly in some states.
This means the emissions benefit of electric vehicles varies by location.
Drivers in states with higher renewable shares see greater emissions reductions.
Over time, grid decarbonisation is expected to amplify the climate benefit of electric transport.
Charging infrastructure and regional Australia
Public charging infrastructure has expanded rapidly in recent years.
Australia now has more than 1,270 public fast charging locations, according to industry tracking[3].
Most chargers are concentrated in major cities and along key highways.
Regional and remote areas still face coverage gaps.
These gaps affect confidence for long distance travel and regional adoption.
Home charging remains the primary method for most electric vehicle owners.
Renters and apartment residents face greater barriers.
Vehicle to grid and vehicle to home systems
Electric vehicles can do more than consume electricity.
Vehicle to grid and vehicle to home systems allow cars to export power back to homes or the grid.
ARENA supported trials in Australia show these systems can improve grid stability and reduce household energy costs[4].
Widespread adoption would require compatible vehicles, chargers and regulatory reform.
At present, only some models support these functions.
The long term potential is significant but uncertain.
Economic and equity challenges
Upfront cost remains a major barrier to electric vehicle adoption.
Although running costs are lower, purchase prices are higher than comparable petrol vehicles.
Government incentives vary by state and are subject to change.
Lower income households are less able to access new vehicles of any type.
Without targeted policy, electrification risks widening transport inequality.
Hybrids currently offer a more accessible emissions reduction pathway for many buyers.
Minerals, recycling and supply chains
Electric vehicle batteries rely on minerals such as lithium, nickel and cobalt.
Australia is a major lithium producer, linking transport electrification to domestic resource policy[5].
Battery recycling systems are still emerging.
Clear national frameworks are needed to manage waste and recover materials.
Supply chain transparency will influence public acceptance.
What policymakers and planners must do next
The evidence shows electric and hybrid vehicles can meaningfully reduce emissions in Australia.
However, benefits depend on grid decarbonisation, infrastructure rollout and equitable access.
In the next five years, governments must accelerate renewable energy, expand regional charging and improve data transparency.
Standards for vehicle emissions, apartment charging and battery recycling will shape outcomes.
Without coordinated policy, fleet electrification will be slower and less effective.
References
- Electric Vehicle Council, Lifecycle emissions of electric vehicles in Australia
- Bureau of Infrastructure and Transport Research Economics, Road Vehicles Australia January 2025
- Australian EV Infrastructure data summary
- Australian Renewable Energy Agency, Vehicle to grid trials
- Australian Government, Critical Minerals Strategy
- National Transport Commission, New vehicle sales trends
- Australian Energy Market Operator, Integrated System Plan
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