Electric Vehicle Council says rate rises won't slow EV demand as 2026 sales double

Rate rise lands as EV Council predicts continued EV growth

The Electric Vehicle Council (EVC) does not expect the Reserve Bank of Australia's latest interest rate rise to dampen electric vehicle demand, pointing to sales growth during previous rate-increase cycles. CarExpert reports that the EVC's head of legal, policy and advocacy, Aman Gaur, told the publication: "We've seen half a dozen rate rises, and we've seen EV sales go north during that period. So, if you're looking backwards, look forwards." ¹²

The comments came the day after the RBA increased the cash rate by 0.25 percentage points to 4.6 per cent, its highest level since 2011, which the Reserve Bank said was designed to help reduce inflation to its target range of between two and three per cent. Australian Bureau of Statistics figures released the same day showed the Consumer Price Index rose four per cent in the 12 months to August 2026, up from 3.5 per cent in July. ¹²

Gaur told CarExpert that Australians will continue to move away from "one of the most discretionary sources of spending in their weekly budget, which is the petrol bill", using electric cars to address rising mortgage repayments. He also cautioned that whether the resulting fuel savings are inflationary is "a hard one to say", depending on whether households spend the money back into the economy or put it into mortgage repayments. ¹²

EVC chief executive Julie Delvecchio told CarExpert that recent Australian Bureau of Statistics data showed EV sales rising significantly even as overall new-vehicle sales softened, and described EVs as "one of the single most powerful cost-of-living measures available to families", citing savings of about $3,000 a year against petrol running costs. ¹²

Record sales and market share milestones

The State of EVs 2026 report, released by the EVC on Wednesday, recorded 157,957 electric vehicle sales between January and June, a 117 per cent increase on the same period last year, according to Guardian reporting on the figures. That total includes about 104,000 battery-electric vehicles and 54,000 plug-in hybrids. The Sydney Morning Herald puts the split at 103,716 battery-electric and 54,241 plug-in hybrid sales. ³⁴⁵

Electrified vehicles accounted for more than one in four new vehicles sold in the first half of the year, and EVs reached a record 24.9 per cent share of total new-vehicle sales in August 2026, according to CarExpert's coverage of the report. In August, Australians bought more new electric vehicles than petrol-powered ones, with EVs also outselling diesel passenger vehicles. ¹²³

Federal Energy Minister Chris Bowen said the August figures, showing 27,078 full electric vehicles sold against 25,824 petrol-only vehicles, marked the first time EVs had outpaced petrol-only cars and called it a "landmark moment". The report was launched by Bowen, who is Federal Minister for Climate Change and Energy. ⁴⁸

The EVC said Australia's EV fleet passed 612,000 vehicles by the end of June, with Gaur telling Guardian Australia that the nation was "well on track" to hit one million EVs on Australian roads by next year. The Australian Capital Territory remained the nation's EV capital, with 44 per cent of new cars registered there electric, while Tarneit in Melbourne's west had the highest uptake of any individual postcode. ³

Fuel prices and cost-of-living pressures

Petrol and diesel prices have risen in recent weeks. CarExpert reports that the Australian Institute of Petroleum recorded a national average retail petrol price of 237.5 cents per litre for the week ending September 27, compared with an average of 189.7 cents over the previous 12 months, while diesel averaged 286.7 cents per litre, up 13 cents on the previous week. ¹²

The averages include record fuel prices earlier in the year, which prompted the federal government to halve the fuel excise paid by motorists and suspend the Heavy Vehicle Road User Charge from April 1. Earlier in 2026, the average diesel price peaked at 319 cents per litre, with petrol peaking at an average of 225 cents per litre. ¹²

Delvecchio told Guardian Australia that EVs were being taken up as a cost-of-living measure, with the ongoing fuel crisis an accelerating factor but "not the starting gun". The EVC's State of EVs 2026 report stated that "2026 is the year EVs became one of the best ways to save money", attributing the shift to cost-of-living pressure and fuel security rather than emissions targets. ¹²³

The Sydney Morning Herald reports that soaring petrol and diesel prices stemmed from the war between the United States and Iran cutting off global oil supplies, while an influx of lower-cost, predominantly Chinese, brands introduced models priced close to comparable petrol and diesel vehicles. Delvecchio described the surge as down to a "powerful combination" of greater vehicle availability, improved affordability and awareness of running-cost savings. ⁴

Charging network, policy scores and the 2035 gap

The report found the number of public charging locations grew to 4,268 nationally, up 235 per cent from its previous count in June 2025. However, it warned the greatest risk was that the pace and quality of charging development fail to keep up with EV uptake, risking queues, black spots and unreliable equipment that could dent public confidence among first-time EV owners. ³⁴

Despite the sales surge, the EVC says far more growth is needed. CarExpert reports that Gaur said at a media briefing that the battery-electric fleet had just ticked over 500,000 vehicles, but that figure "needs to increase by 10 times to hit the 2035 target", citing Climate Change Authority estimates that around five million battery-electric cars are needed for the government's 62 per cent emissions reduction target at the lower band. ⁵⁶

The council is calling for the New Vehicle Efficiency Standard, which took effect on January 1, 2025 and currently schedules annual CO2 cap reductions only until 2029, to be extended beyond 2029 in line with the government's 2035 emissions reduction target. Under the current standard, the 2029 cap for Type 1 passenger vehicles stands at 58g/km, a figure CarExpert notes no purely combustion-powered or hybrid new model in Australia currently achieves. ³⁶

The report ranked the federal government, NSW and the ACT as the nation's best on EV policy, while Queensland, South Australia, Tasmania and the Northern Territory scored equal last with two out of 10. Gaur said Queensland and the Northern Territory were moving back towards fossil fuels, citing Queensland's recent investment in 630 diesel buses. ³⁵

Trucks lag and a hybrid-heavy precedent

The transition to electric vans and trucks is lagging, with battery-electric models accounting for one per cent of van sales and 0.6 per cent of truck sales, according to the EVC. Gaur said trucks were "left eating dust" because of insufficient financial support for small businesses running freight operations, and called for restrictions on heavy electric vehicles to be removed and for tax concessions or financial assistance to boost adoption. ⁵

Historical context frames this year's turnaround: the EVC's first annual report in 2017 recorded just 2,284 electrified vehicle purchases, and since then the number of available electric and plug-in hybrid models has grown from 23 to 196 while charging locations grew from 476 to 4,268, the report found. ⁵

CarExpert's own analysis in December 2025 showed a different pattern in the previous year: battery-electric sales fell 12.7 per cent year on year across the first 11 months of 2025 while plug-in hybrid sales jumped 130.6 per cent and conventional hybrids rose 14.0 per cent, illustrating how quickly the sales mix has shifted in 2026. ⁷