Australia Electric Vehicle Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Australia Electric Vehicle Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Australia Electric Vehicle Market was valued at USD 3.89 billion in 2021 and is expected to reach USD 20.0 billion by 2027 registering a CAGR of 33.06% during the forecast period (2022 - 2027).

The COVID-19 pandemic initially had a negative impact on the market as the shutdown of manufacturing units and lockdowns resulted in a decrease in sales during the first half of 2020. However, eased restrictions coupled with notable initiatives of the government in form of incentives and relief packages helped the market regain momentum by 2021. For instance, Australia recorded 20,665 EV sales in 2021, a significant increase from the 6,900 sold in 2020, which means electric cars now make up 1.95% of the new car market.

Over the medium term, Increased demand for fuel-efficient, high-performance, and low-emission vehicles, increasingly strict laws and regulations on vehicle emissions, declining battery costs, etc. are expected to act as primary factors driving the market growth over the forecast period. Further, the active presence of key global players like Tesla, MG, and others with a focus on adopting strategies like offering cost efficient models, product innovations, etc. expected to create positive outlook for the market in long run.

Government regulations to phase out fossil fuel-powered vehicles, government expenditures to improve public EV charging infrastructure, likely to contribute to market development. Further, Increasing investments and product launches by major OEMs into the country and their focus on localizing supply chain facilities to create positive outlook in the market.

New Southwales and Victoria are home to the majority of Australia's electric vehicles, followed by South Australia region. These states play key role in the growth of australia electric vehicle market with majority demand being supported by government initiatives and supportive charging infrastructure.

Key Market TrendsHybrid Electric Vehicle Segment of Market Likely to Hold Significant Share in the Market

Some of the major factors driving the growth of the market studied are the enactment of stringent emission and fuel economy norms and government incentives for promoting the purchase and adoption of hybrid vehicles. There has been tremendous growth in hybrid vehicles all over the country as these vehicles appeal to a much larger audience when compared to full-electric vehicles. They combine the reliability, long-range drivability, and instant refueling benefits of petrol and diesel vehicles, with better fuel economy and smaller carbon footprint of electric vehicles. For example,

• Australians bought 70,466 conventional hybrid cars in 2021, up 20.3% from sales in 2020. These cars sometimes referred to as self-charging hybrids or HEVs, now makeup 7% of all new passenger cars, SUVs, pickups, and vans sold in Australia. According to data from the Federal Chamber of Automotive Industries (FCAI), conventional, "self-charging" hybrid vehicles accounted for 89.2 percent of those electrified sales.
• Toyota's lineup of hybrid cars and SUVs accounts for 92.9 percent of those sales. The mid-size RAV4 SUV led the list with 25,850 sales, the Corolla with 14,657 units, and Camry with 10,979 units. In addition, Lexus, a luxury division of Toyota, set records for hybrid sales in 2021, with petrol-electric models making up 38.8% of the 9290 vehicles the company reported as sold. This is higher than the growth rates for conventional hybrids and electric vehicles, which were 12% and 127%, respectively. The 41,056 conventional hybrids delivered so far this year outsell the 2,941 plug-in hybrids sold so far. However, with a wide range of vehicles available for sale in Australia across 17 manufacturers and 30 model lines, plug-in hybrid sales are gaining momentum.

Owing to the growing sales, the portfolio for electric vehicles of key OEMs is expanding with many consumers preferring to go in for fully hybrid or mild hybrid vehicles across the country. For instance, In July 2022, Nissan announced the new Nissan X-Trail e-Power hybrid model will be available in Australian dealerships beginning in 2023.

• In March 2022, Honda has confirmed plans to launch the next-generation HR-V in Australia. The new model will be available in two trim levels with a choice of petrol or hybrid power, pitting Honda against Toyota's C-HR Hybrid and the upcoming Corolla Cross Hybrid.

With governments taking stringent actions, in the forms of regulations and incentives, along with the increased initiatives for the provision of public charging stations for electric vehicles, hybrid electric vehicle segment of market studied is expected to grow at a high rate during forecast period.

Growing Investments into Developing Charging Infrastructure in the Country

The growth of electric vehicles across the country is mainly supported by supportive charging infrastructure across the country. The massive investments in electric vehicles by major automotive companies, such as Toyota, Honda, Tesla, General Motors, and Ford, coupled with their EV charging strategies propel demand in the market. The Australian Government has been actively funding to improve the EV charging infrastructure across the country. For instance,

• In June 2022, to speed up the EV revolution across NSW, the government of New South Wales (NSW) announced an additional AUD 38 million in charging infrastructure approved as part of the 2022–23 NSW Budget. The extra financing brings the State's EV commitment under the NSW Electric Vehicle Strategy to AUD 633 million. The financing will leverage large private sector investments to meet rising demand. It includes AUD 10 million to co-fund around 125 medium and large apartment buildings with more than 100 car parking spaces to upgrade their electrical systems to accommodate EV charging and AUD 10 million to co-fund 500 kerbside charge points to provide on-street charging in residential streets.
• In February 2022, The second round of the Australian government's Future Fuels Fund has begun, and the Australian Renewable Energy Agency (ARENA) will contribute AUD 127.9 million to co-finance charging infrastructure and H2 refueling stations to promote the use of battery and hydrogen vehicles in fleets.

Several states have been actively pursuing the fast-charging goals by creating strategies that suit their current EVs. Some of the state goals include,

• In May 2022, With an AUD 131 million investment to create the biggest charging network, New South Wales will be the fastest state in Australia to purchase and operate an electric vehicle (EV). This investment will increase public 50 kW or above fast charging locations around the State by the NSW Electric Vehicle Strategy- external site.

Various charging infrastructure initiatives have been undertaken by key players in the market to support the growing electric vehicle demand in the country. For instance,

• In October 2020, and Bustech, Australia’s largest supplier of transit buses designed, engineered and manufactured in Australia, announced an agreement to build the next generation Bustech XDi low floor transit bus using Cummins zero-emission battery electric and hydrogen fuel cell technologies.The electric and fuel cell powertrain components will be manufactured in the United States, with final assembly and integration into the buses taking place in Australia.

Such developments and instances anticipated to contribute significantly for overall demand in the market during the forecast period.

Competitive Landscape

The Australia Electric vehicle market is moderately consolidated owing to its competitive nature, and the presence of a large number of players operating it across the country. These players are estimated to focus on the development of new products and innovations, which will help them expand their product portfolio and attract a large number of consumers across the country. For instance,

• In August 2022, Toyota Australia announced pricing for the all-new Corolla Cross small SUV, which arrives in local showrooms in October with an entry-level recommended retail price of AUD 33,000. Customers will be offered a lineup of eight different variants with a choice of two-wheel drive or electric all-wheel drive, gasoline, or hybrid powertrains, and three grades - GX, GXL, and flagship Atmos.
• In March 2022, Honda has confirmed plans to launch the next-generation HR-V in Australia. The new model will be available in two trim levels with a choice of petrol or hybrid power, pitting Honda against Toyota's C-HR Hybrid and the upcoming Corolla Cross Hybrid.
• In October 2021, Ford Australia announced that it will introduce at least five new electrified vehicles by the end of 2024 starting with full-size, pure-electric E-Transit as a part of their electrification strategy. E-Transit features both AC charging and DC fast-charging. The vehicle’s 11.3 kW on-board charger is capable of delivering a 100 per cent charge in up to 8.2 hours. Ford Australia’s EV roadmap forms part of Ford’s global investment of USD 30 billion in electrification by 2025.

Some of the Key players operating in the Australia electric vehicle include Toyota Motor Corporation, Tesla, Lexus corporation, Honda Motor Corporation, and others.

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